—550 


BOOK   330.P544S   <=-J^^, ,_-,  g<- 
PHIUIPS   #    SOCIAL   STRUGGLES 


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SOCIAL    STRUGGLES. 


THE 


FUNDAMENTAL    FACTS  AND  PRINCIPLES 

RELATIVE  TO 

VALUES,  PRICES,    MONEY    AND    INTEREST;    NATIONAL 
BANKS,  FRANCHISES, 

THE  SILVER  QUESTION, 

SOCIALISM,  CAPITAL  AND  LABOR.  AND  BUSINESS 
DERANGEMENT. 


BY 


JOHN  PHILIP  PHILLIPS. 


Whatever  cannot  bear  investigation  has  no  right  to  exist. 


NE\Y  HAVEN,  CONN.: 

Press  of 

TUTTLE,  MOREHOUSE  &  TAYLOR. 

iSS6. 


Entered  According  to  Act  of  Congress,  in  the  Year  1886,  by 

JOHN    PHILIP   PHILLIPS, 
In  the  Office  of  the  Librarian  of  Congress,  at  Washington. 


Electrotyped  by  E.  B.  SHELDON  &  CO., 
393  State  St.,  New  Haven,  Ct. 


DEDICATION. 


TO    THE 
MEN    WHOSE    STEADFAST  VALOR    HAS    BEEN  OUR  NATIONAL  RELIANCE 
IN    TIMES    OF    WAR,    AND    WHOSE    PATIENT    INDUSTRY    HAS    EVER 
BEEN     OUR     SUPPORT  ;      TO    THOSE    WHOSE    BUSINESS    AND 
DAILY     BREAD     ARE    VITALLY    AFFECTED    BY    FLUCTUA- 
TIONS IN  PRICES,  WAGES  and  INTEREST; 

TO.  THE     FARMERS,    MECHANICS   AND   OTHER 

HONEST     CREATORS     OF     WEALTH,     THIS 

WORK  IS  RESPECTFULLY  DEDICATED. 


PREFACE. 


A  WIDELY  spread  feeling  of  dissatisfaction  with  the  pres- 
ent organization  of  society  exists  in  every  civilized  nation. 
In  some  countries  this  discontent  has  assumed  the  form  of 
secret  organizations,  one  of  the  objects  of  which  is  to  de- 
stroy the  lives  of  kings  and  other  representatives  of  the 
present  social  system.  Europe,  in  time  of  peace,  is  covered 
with  vast  standing  armies,  armed  with  the  most  deadly 
weapons  ingenuity  has  created,  and  trained  to  use  those 
arms  with  special  reference  to  the  destruction  of  human  life. 
The  ostensible  necessity  of  these  armies  is  to  protect  one 
nation  from  the  aggressions  of  others.  But  another  and  a 
deeper  intent  lies  behind  those  armed  millions.  That  par- 
tially veiled  purpose  is  to  prevent  the  masses  of  the  popula- 
tion from  rebelling  against  their  own  governments  and 
destroying  the  existing  social  fabric.  The  net  result-  of 
what  is  called  the  "  highest  civilization  "  is  the  virtual  ad- 
mission that  it  is  so  hateful  to  the.  majority  living  under  it, 
that  huge  armies  of  blood-hounds  must  be  kept  to  compel 
submission.  Many  European  thinkers  believe  that  conti- 
nent drifting  into  a  terrible  revolution. 

Within  a  century  this  country  has  increased  in  population 
about  sixteenfold.  The  increase  in  wealth,  however,  has 
been  still  greater.  But  it  is  a  startling  fact  that  every  year 
the  inequality  between  the  amount  of  this  vast  wealth  pos- 
sessed by  each  individual  grows  wider  and  wider.  We  for- 
merly supposed  that  our  laws  and  institutions  produced 
both  political  and  social  equality,  and  that  the  class  distinc- 
tions and  consequent  bitter  hatreds  and  jealousies  of  Euro- 
pean society  could  not  here  flourish.  But  to-day,  the 
smothered  discontent,  which  in  some  countries  makes  the 
dominant  classes  feel  as  if  a  volcano  were  seething  beneath 


yj  PREFACE. 

them,  has  obtained  a  firm  lodgment  in  this  country.  Many 
of  the  conditions  which  exist  in  Europe  are  rapidly  being 
developed  here. 

Only  fifteen  years  ago  it  was  generally  believed  that  dis- 
satisfaction with  our  institutions  was  a  transient  feeling  en- 
tertained by  comparatively  few  persons.  Resumption  of 
specie  payments  was  supposed  an  effectual  panacea  for  such 
social  disorder.  At  the  enormous  cost  of  much  unemployed 
labor  and  industrial  disorganization  for  several  years,  this 
remedy  has  been  applied.  But  instead  of  being  cured 
thereby,  the  inequality  of  wealth  has  grown  greater,  and  the 
mutterings  of  discontent  have  grown  louder  and  deeper. 
These  mutterings  are  not  yet  formulated  into  a  definite 
creed  and  purpose,  but  they  have  forced  a  recognition  of 
their  growth  as  a  menace  to  public  harmony  and  welfare  in 
the  future.  Great  numbers  of  people  have  one  feeling  in 
common.  Without  assigning  a  reason  therefor,  they  in- 
stinctively feel  that  "something  is  wrong  "  in  the  present 
condition  of  affairs.  They  are  not  yet  angry,  but  are  an- 
noyed by  a  vague  sense  of  being  the  victims  of  some  injus- 
tice and  wrong,  the  exact  source  and  nature  of  which  per- 
plexes them.  At  present  this  state  of  mind  is  chiefly 
expressed  by  trades  unions  and  labor  organizations  of 
various  kinds.  To  a  considerable  extent  these  bodies  have 
imagined  that  those  with  whom  they  came  in  immediate 
Contact  were  the  chief  cause  of  their  troubles.  Not  under, 
standing  the  facts  and  principles  involved  in  their  situation, 
they  have  failed  to  see  that  laws  and  third  parties,  with 
whom  they  were  not  in  direct  contact,  were  the  real  source 
of  difficulties  and  wrongs  from  which  employers  often  suf- 
fered as  much  as  themselves.  Consequently,  redress  of 
grievances  has  been  sought  in  warring  against  their  em- 
ployers by  organized  strikes.  These  have  inflicted  great 
losses  on  society,  and  generally  have  left  the  workmen  in 
worse  condition  than  before.  Such  misdirected  and  often 
pitiful  efforts  can  only  be  prevented  by  a  wider  diffusion  of 
information  in  regard  to  the  principles  which  govern  prices 
and  wages. 


PREFACE.  vii 

In  a  free  country,  dissent  from  laws  and  conditions 
inevitably  assumes,  sooner  or  later,  the  form  of  political 
action.  People  with  common  interests  naturally  have 
thoughts  in  common,  and  whenever  these  sentiments  are 
shared  by  a  considerable  number  of  persons,  and  become 
crystallized  into  a  common  desire  for  a  definite  change  of 
policy  or  law,  political  action  will  follow.  Either  a  new 
party  will  arise,  or  one  of  those  existing  will  be  dominated 
by  new  ideas.  Thus  far,  there  has  not  been  sufificient  unity 
of  purpose  among  the  dissatisfied  multitude  to  organize  and 
muster  a  large  number  of  voters.  But  organization  and 
leaders  under  some  name  will  appear  whenever  those  now 
uneasy,  but  doubtful  what  they  want,  become  converted  by 
further  thought  and  events  into  persons  with  a  settled  pur- 
pose. 

A  revolt  against  permanently  following  the  road  we  are 
now  traveling  will  certainly  occur.  It  is  therefore  impor- 
tant that  every  one  should  clearly  understand  that  every 
evil,  every  wrong,  and  every  error  in  our  institutions,  and 
every  defect  in  their  practical  workings,  can  be  cured  by  a 
peaceful  revolution  at  the  ballot-boxes.  Such  knowledge 
will  prevent  the  folly  of  seeking  redress  of  grievances  by 
violent  methods. 

The  first  element  in  the  successful  treatment  of  a  sick 
man  is  a  careful  study  of  his  disease.  When  what  is  at 
fault  is  known,  the  effect  of  different  remedies  on  those 
wrong  conditions  must  be  considered  before  an  appropriate 
prescription  can  be  made.  Both  the  facts  and  the  princi- 
ples relative  to  the  case  must  be  weighed  ;  else  the  patient 
is  in  more  danger  from  his  doctor  than  from  the  malady. 

In  like  manner,  when  anything  is  at  fault  with  the  body 
politic,  unless  we  first  carefully  study  the  matter,  we  may 
use  remedies  which  will  aggravate  the  trouble.  Both  the 
facts  and  the  related  principles  must  be  considered  before 
intelligent  political  action  can  be  taken. 

Those  who  desire  changes  in  our  social  policy  are  mostly 
farmers,  mechanics,  and  laborers.  Examination  shows  that 
this  fact  is  the  direct  or  indirect  result  of  considerable  lee- 


viii  PREFACE. 

islation  adverse  to  the  interests  of  those  classes.  These 
persons  are  entitled  to  vote,  and  their  numbers  are  so  great 
that  the  control  of  law-making  would  at  once  be  in  their 
hands  if  they  voted  unitedly  to  protect  their  own  interests. 
The  chief  obstacle  to  such  a  course  has  lain  in  the  fact  that 
the  majority  of  the  laboring  classes  have  not  studied  true 
political  economy.  Consequently  they  have  lacked  clear 
convictions  in  regard  to  the  effects  of  proposed  legislation ; 
and,  in  this  uncertain  frame  of  mind,  have  been  divided  and 
misled  by  false  and  hypocritical  cries  into  the  support  of 
measures  intended  for  their  own  injury,  and  the  benefit  of 
persons,  small  in  numbers,  but  very  cunning  and  unscrupu- 
lous. 

That  the  present  condition  of  things  will  remain  undis- 
turbed is  impossible.  The  laboring  classes  are  slowly  but 
steadily  growing  more  conscious  both  of  their  political 
power  and  of  the  existence  of  defects  and  wrongs  in  our  in- 
stitutions and  laws.  Consequently  greater  political  combi-- 
nations  and  efforts  to  improve  their  own  condition  may  be 
expected  from  those  persons  in  the  future.  How  much-  of 
this  political  action  will  be  judicious  and  well  calculated  to 
promote  the  best  interests  of  the  whole  community,  no  one 
can  foretell.  But  with  absolute  certainty  we  do  know 
that  whoever  helps  his  countrymen  to  more  easily  obtain 
and  fully  understand  a  single  fact  or  principle  of  political 
economy,  thereby  contributes  his  mite  toward  properly 
directing  the  future  national  thought  and  action.  With  the 
hope  of  making  such  a  contribution,  this  book  has  been 
written.  Its  aim  is  to  dissect  and  illustrate  by  examples 
and  historical  references  some  of  the  fundamental  principles 
of  political  economy,  and  to  state  them  so  fully,  and  in  such 
a  plain  and  familiar  manner,  that  any  person  of  ordinary 
intelligence  who  has  never  before  read  a  line  on  the  subject 
can  easily  understand  them. 

That  the  doctrines  herein  set  forth  should  conform  to  the 
teachings  of  the  majority  of  writers  on  such  topics  has  been 
deemed  of  no  consequence  whatever.  But  it  is  important 
that   correct    principles   should   be  elucidated.     Therefore 


PREFACE.  ix 

great  pains  and  care  have  been  taken  to  sift  out  common, 
but  false,  assumptions  and  theories,  and  to  state  nothing  as 
truth  which  cannot  be  verified. 

It  will  doubtless  seem  to  some  readers  that  apparently 
plain  things  are  dwelt  on  with  unnecessary  and  tiresome 
detail.  Such  persons  should  remember  that  an  understand- 
ing of  political  economy  can  only  be  obtained  by  observing 
the  same  conduct  we  follow  when  learning  any  other  sub- 
ject or  thing.  A  mechanic's  apprentice  who  has  fully 
learned  to  properly  use  half  a  dozen  tools  is  well  advanced 
in  a  knowledge  of  his  trade.  And  in  political  economy,  as 
in  everything  else,  a  knowledge  of  many  complex  things 
depends  on  first  getting  a  clear  comprehension  of  a  few  sim- 
ple things.  In  arithmetic  no  progress  can  be  made  until 
the  pupil  has  learned  to  add,  subtract,  divide,  and  multiply. 
When  the  alphabet  of  a  subject  is  thoroughly  learned,  the 
hardest  work  is  done.  If  the  reader  will  patiently  consider 
the  full  meaning  of  the  few  elementary  facts  and  principles 
herein  discussed,  and  pass  none  of  them  carelessly  by  as 
unimportant,  he  will  soon  discover  that  the  "  difificult  and 
abstruse  questions  of  political  economy"  which  are  con- 
stantly talked  of,  are,  in  reality,  easy  and  simple  questions. 

It  must  be  borne  in  mind,  that  whoever  wishes  to  learn 
something  about  any  subject  whatsoever,  must  not  begin  his 
studies  with  the  assumption  that  he  is  the  incarnation  of 
wisdom  and  already  knows  all  about  it.  "  Seest  thou  a 
man  wise  in  his  own  conceit?  there  is  more  hope  of  a  fool 
than  of  him." 

Those  who  have  a  special  desire  to  examine  the  silver 
question  may  think  too  much  space  is  devoted  to  element- 
ary principles  before  reaching  and  discussing  it.  But  it 
should  be  borne  in  mind  that  the  topic  of  silver  is  only  a 
fragment  of  the  subject  of  money  in  general,  and  can  only 
be  properly  understood  in  connection  therewith. 

And  the  subject  of  money  can  only  be  clearly  compre- 
hended by  those  who  realize  the  great  practical  importance 
of  such  knowledge  in  the  every  day  affairs  of  business  and 
therefore  are   willing  to   slowly  read  and   carefully  consider 


X  PREFACE. 

the    facts    and    principles    upon   which  the   use  of  money 
rests. 

In  an  editorial  note,  the  Century  Magazine  for  Septem- 
ber, 1885,  gives  expression  to  the  popular  wonder  that  a 
country  with  such  an  industrious  population  and  such 
vast  and  varied  natural  resources  as  the  United  States  pos- 
sess, should  not  have  uninterrupted  prosperity,  and  then 
says  : 

"  What  a  strange  spectacle  this  country  presents  at  this  very  hour  ! 
Money  is  plenty — fifty  or  sixty  millions  on  deposit  in  the  banks  of  New- 
York  City  alone  !  Food  is  plenty  ;  the  granaries  at  the  West  are  full  of 
old  wheat,  and  though  the  wheat  crop  of  the  present  year  does  not 
promise  well,  the  corn  crop  is  likely  to  be  larger  then  ever  before  ;  there 
is  no  fear  of  scarcity.  Manufactured  goods  are  plenty  ;  the  store-houses 
of  the  manufacturers  and  the  shelves  of  the  merchants  are  crowded  with 
them.  Labor  is  plenty ;  five  hundred  thousand  idle  men  are  asking  for 
work.  Yet  in  the  midst  of  this  abundance  a  great  industrial  and  com- 
mercial depression  has  overtaken  us.  At  the  time  of  writing  this,  work- 
men are  selling  their  labor  at  the  lowest  prices,  and  many  are  unable  to 
sell  it  at  any  price ;  merchants  and  manufacturers  find  a  dull  market 
for  their  wares ;  the  railroads  report  losses  instead  of  gains  ;  failures 
multiply. 

"  The  situation  is  not  only  pitiful,  it  is  absurd.  What  is  the  explanation 
of  it  ?     Who  is  responsible  for  it .'' " 

True  elementary  principles  furnish  a  complete  answer  to 
the  foregoing  questions.  Either  through  ignorance,  or  self- 
ishness, the  fundamental  principles  of  political  economy 
have  generally  been  misapprehended  and  wrongly  stated. 
Hence,  many  honest  inquirers  have  been  perplexed  by  prob- 
lems of  comparatively  easy  solution.  This  difficulty  has 
not  arisen  from  defective  reasoning,  but  by  starting  from 
false  standpoints. 

Contentment  among  all  classes  of  good  citizens  and  steady 
industry  and  economy  are  the  prime  requisites  of  a  perma- 
nent national  prosperity.  Nothing  promotes  that  condition 
and  fosters  those  virtues  more  than  a  public  policy  of  fair 
dealing  with  all  persons.  Nothing  is  so  safe  and  profitable 
as  simple  Justice.  In  a  country  governed  by  the  majority 
of   voters,    the    best     safeguard    of    the    rights    and    inter- 


PREFACE.  xi 

ests  of  each  indiv^idual  is  his  clear  knowledge  of  the  effect 
of  legislation  upon  them. 

These  pages  are  therefore  presented  with  the  earnest  wish 
that  they  may  shed  some  light  on  the  great  problems  of  the 
immediate  future,  viz. :  What  measures  does  impartial  jus- 
tice require  shall  be  adopted  to  protect  and  preserve  the 
equal  rights  and  proper  relations  of  creditor  and  debtor,  of 
capital  and  labor?  What  political  action  will  best  prevent 
the  strong,  the  cunning,  and  the  rich  from  insidiously  op- 
pressing and  robbing  the  weak,  the  simple,  and  the  poor? 
How  shall  we  displace  that  fruitful  source  of  evils — a  cur- 
rency whose  purchasing  power  is  subject  to  frequent  and 
great  changes — by  money  convenient  to  use  and  of  more 
uniform  value  than  any  we  have  heretofore  employed  ? 


SOCIAL  STRUGGLES. 


INTRODUCTORY  CHAPTER. 

Natural  Laws  are  not  only  Invariable  but  they  apply  Impartially  to  all 
things. — Common  error  of  mistaking  the  Results  of  bad  Statutory 
Laws  for  unavoidable  Results  of  Natural  Laws. — What  Political 
Economy  is. — A  Mistaken  Belief. — How  Economic  Laws  should  be 
Considered. — Mankind  are  Governed  by  many  Emotions  and 
Thoughts. — Common  mode  of  writing  Economic  works. — Political 
Economy  is  an  Imperfect  Science. — A  Confession. —  Ignorance  is  the 
Mother  of  Credulity. — Why  Mankind  make  such  slow  Progress. 
— Original  Thought  is  not  Common. — Mankind  prefer  Old  to 
New  Things. — Evils  Perpetuate  Themselves. — Need  of  Elementary 
Study. — Terrible  Fruits  of  False  Premises. 

Nothing  is  permanently  settled  nntil  correct  principles  are 
adopted.  Public  policy  will  be  fixed  iviicn  based  on  absolute 
triitJi.  There  may  be  a  lull  in  the  agitation  of  social  topics, 
but,  if  so,  sooner  or  later  it  zvill  inevitably  re-appear  ivitJi  in- 
creased volume  and  force.  Eddies  exist  in  Jiuman  thought 
and  human  progress,  but,  7ievertheless,  they  form  a  steady  and 
continuous  stream. 

This  is  not  a  world  of  chance,  but  a  world  of  law.  It  is 
not  a  world  of  accident,  but  a  world  of  cause  and  effect. 
It  is  therefore  folly  to  imagine  that  existing  conditions  have 
come  upon  us  in  a  mysterious,  miraculous  way.  Whenever 
a  result  is  produced,  we  should  feel  certain  that  its  parent, 
a  cause,  can  be  found,  if  we  will  but  diligently  search  for  it. 

If  we  lift  a  stone  from  the  ground  and  let  go  of  it,  the 
same  thing  always  happens.  It  does  not  move  upward  or 
sideways  ;  it  always  falls  directly  toward  the  earth's  center. 
This  we  call  the  law  of  gravitation.     By  the  term   "  law  " 

I 


2  SOCIAL  STRUGGLES. 

we  mean  the  course  and  conduct  invariably  observed  and 
followed  by  all  things  placed  under  the  same  circumstances. 
Therefore,  when  we  speak  of  the  *'  law  "  relative  to  a  given 
thing,  we  mean  the  mode  of  action  and  the  result  which  al- 
ways take  place  and  follow  the  existence  of  a  certain  com- 
bination of  facts. 

WHAT  POLITICAL  ECONOMY  IS. 

Political  economy  may  be  defined  as  a  statement  of  the 
course  which  human  affairs  will  probably  take  under  given 
conditions.  In  other  words,  it  describes  how  men  will  think 
and  act  under  certain  circumstances.  It  is  a  description  of 
some  of  the  laws  which  regulate  human  conduct.  The 
wealth  of  a  squirrel  consists  of  his  house  and  his  store  of 
food.  These  satisfy  his  wants  and  make  him  rich. 
Whoever  should  write  an  accurate  description  of  the  con- 
duct of  this  interesting  little  fellow  in  getting  and  using 
his  riches,  would  write  the  political  economy  of  a  squirrel. 
A  description  of  man's  conduct  when  in  quest  of  riches, 
when  using  riches  already  acquired,  and  the  results  flowing 
from  his  various  modes  of  trying  to  accomplish  these  pur- 
poses constitute  the  political  economy  of  man.  The  wants 
of  man  are  rarely  satisfied.  Therefore  he  is  seldom  as  rich 
as  a  squirrel.  But  he  is  continually  occupied  either  in  try^ 
ing  to  get  wealth,  or  in  using  it.  In  doing  these  acts 
his  conduct  resembles  that  of'  a  squirrel ;  that  is,  he  usu- 
ally follows  a  certain  course  of  action  in  order  to  obtain  a 
certain  thing,  or  produce  a  certain  result.  These  actions 
and  their  results  have  a  tendency  to  assume  uniform  and 
definite  shape  and  character.  They  are  the  reflections  of 
human  thought  from  the  mirror  of  varying  circumstances  and 
conditions.  .  Want  of  discernment  may,  and  often  does,  pre- 
vent its  full  recognition  ;  but  the  shadow  must  always  be  a 
correct  image  of  the  substance.  These  are  called  the  laws 
of  political  economy. 


HOW  TO  STUDY  MANKIND. 


A  MISTAKEN  BELIEF. 


It  is  a  prevalent  belief  that  the  laws  of  political  economy 
are  so  abstruse  and  mysterious  that  a  life-time  of  prodigious 
study  is  required  to  understand  them.  Especially  is  it  sup- 
posed that  there  is  something  peculiarly  difificult  about  Fi- 
nance, that  special  and  supernatural  laws  preside  over 
money,  and  that  it  is  impossible  for  an  average  man  to  com- 
prehend the  subject.  The  common-sense  principles  which 
we  every  day  apply  to  the  solution  of  all  other  problems  are 
presumed  to  be  inapplicable  to  political  economy.  This  be- 
lief has  been  put  in  circulation  and  fostered  by  those  whose 
selfish  interests  would  be  advanced  by  the  impression  that 
only  a  few  persons  can  understand  political  economy,  and 
that  they  constituted  those  few.  We  shall  hereafter  show 
the  gross  nature  of  this  imposition. 

HOW  ECONOMIC  LAWS  SHOULD  BE  CONSIDERED. 

To  State  how  a  squirrel  always  gets  and  uses  his  wealth, 
would  be  a  comparatively  easy  task.  But  man  has  a  more 
complex  mental  organization  ;  he  has  a  greater  number  of 
wants  and  a  greater  variety  of  means  to  gratify  them. 
Man  has  a  multitude  of  desires  besides  getting  and  using 
wealth,  and  the  attempt  to  gratify  these  desires  makes  his 
conduct  in  greater  or  less  degree  different  from  what  it 
would  be  if  his  wants  were  as  simple  as  those  of  a  squirrel. 
The  conduct  of  a  man  with  the  mind  of  a  squirrel  would  al- 
ways be  what  some  men  call  "  economic "  ;  that  is,  it 
would  be  governed  by  a  smaller  number  of  laws  than  it  now 
is.  Man's  conduct  when  in  pursuit  of  wealth  and  the  re- 
sults of  such  conduct  would  be  uniform.  But  in  fact  we 
cannot  predict  what  the  "economic  "  conduct  of  a  man  or 
a  nation  will  be  or  what  will  result  therefrom,  under  certain 
conditions,  without  estimating  other  dominant  motives  be- 
sides the  desire  to  acquire  wealth.  We  cannot  study  the 
anatomy  of  a  man's  muscles  without  examining  his  skeleton. 
We  cannot  understand  the  mechanism  of  his  lungs  or 
any  other  portion  of  the  body  without  a  reference  to  all 
other  parts.     The  whole   system  must  be   considered.     In 


4  SOCIAL  STRUGGLES. 

like  manner  when  we  study  the  conduct  of  the  human  race, 
we  must  take  into  account  all  the  causes  which  produce 
and  modify  it. 

Man  is  not  a  mere  machine  or  automaton.  He  is  a  living 
animal  moved  and  directed  by  a  cabinet  of  counselors 
more  numerous  and  changeable  than  ever  advised  any  king 
or  other  potentate.  They  are  human  passions,  human  emo- 
tions and  human  thoughts.  All  human  affairs  are  due  to 
some  form  of  human  action.  All  human  action  is  due  to 
the  action  of  the  human  mind. 

Therefore  any  student  of  political  economy  must  ob- 
serve imperfectly,  and  argue  from  false  premises,  just  so  far 
as  he  ignores  |iuman  nature.  His  conclusions  must  neces- 
sarily be  correspondingly  defective  and  false. 

The  great  majority  of  writers  on  political  economy  have 
imagined  and  assumed  an  ideal  type  of  human  nature  and 
of  human  conduct  flowing  from  this  assumed  type.  This 
ideal  man  is  governed  purely  and  entirely  by  selfishness  and 
avarice, — his  whole  purpose  in  life  is  the  acquisition  of 
wealth.  Actions  in  harmony  with  the  supposed  feelings  of 
this  imaginary  man  they  have  styled  "economic  conduct,  " 
and  at  the  same  time  have  conceded  that  mankind  never  act 
"  economically."  This  is  merely  a  mode  of  obscuring  the 
subject.  We  care  nothing  about  the  conduct  of  a  being 
who  exists  only  in  the  imagination  ;  but  we  are  deeply  inter- 
ested in  the  actual  conduct  of  the  actual  man. 

MANKIND  ARE  GOVERNED  BY  MANY  EMOTIONS  AND 
THOUGHTS. 

Selfishness  is  a  dominant  trait  of  the  majority,  but  this 
has  a  hundred  other  objects  besides  wealth.  Moreover, 
every  man,' no  matter  how  selfish,  has  a  greater  or  less 
streak  of  generosity  in  his  nature.  Every  community 
has  a  minority  of  unselfish  persons  whose  precepts  and  ex- 
ample exert  a  vast  influence  on  the  rest  of  society.  Patriot- 
ism, religion,  love  of  home  and  family,  in  short,  every 
emotion  of  the  human  heart,  has  more  or  less  influence  on 
the    conduct     of   each    individual    unit    of    society.      The 


THE  NEED  OF  COMMON  SENSE. 


5 


social  tendencies  and  movements  of  a  nation  are  a  resultant 
of  the  combined  and  conflicting  ideas  of  each  and  every 
individual  member  of  that  nation.  Consequently,  we  can- 
not estimate  the  result  of  a  given  measure  without  taking 
into  account  all  the  forces  with  which  it  will  be  brought  in 
contact.  Every  cause  which  materially  tends  to  influence, 
modify,  or  direct  human  thought  and  human  action  in  any 
respect  is  directly  or  indirectly  a  factor  in  the  problems 
of  political  economy.  Men  arrive  at  different  conclusions, 
largely  because  they  begin  to  reason  with  a  different  bias. 

COMMON  MODE  OF  WRITING  ECONOMIC  WORKS. 

The  value  of  the  majority  of  works  on  political  economy 
is  impaired  by  the  fact  that  their  authors  have  not,  as  they 
should,  made  the  discovery  of  truth  the  sole  object  of  their 
investigations.  They  have  attempted  to  explain  social 
tendencies  and  conduct  in  such  a  way  as  to  defend  the 
existing  social  and  political  institutions  of  their  country. 
As  most  of  these  writers  have  been,  and  are,  subjects  of 
monarchical  and  aristocratic  governments,  and*  believers 
in  them,  much  of  what  is  called  political  economy  is 
merely  a  special  plea  in  favor  of  those  governments  and  the 
conditions  of  society  which  they  foster. 

In  the  United  States,  ninth-tenths  of  those  who  are 
styled  political  economists  are  mere  copyists  and  imitat- 
ors of  foreign  books  and  their  teachings.  These  persons 
regard  European  institutions  as  models  to  be  admired  and 
not  criticised. 

Theories  which  contain  more  romance  than  truth  and 
common  sense  doubtless  amuse  and  interest  some  persons  ; 
but  they  are  of  no  use  in  studying  the  various  problems  of 
political  economy. 

We  must  ponder  human  nature  as  it  is.  We  must  grap- 
ple with  the  facts  as  they  actually  exist.  We  must  severely 
scrutinize  all  books  written  for  the  purpose  of  vindicating 
or  supporting  an  existing  form  of  government  or  state  of 
society.  Above  all,  we  must  remember  that  the  truth  is 
never  dangerous.     We  must  not  shrink  from  it  even  though 


6  SOCIAL  STRUGGLES. 

it   seem  in   conflict  with   moss-grown  and   beloved  institu- 
tions. 

The  majority  of  economic  writers  have  made  a  curious 
error.  They  have  looked  around  them  and  seen  disorders 
which  are  the  results  of  misgovernment,  selfishness,  and 
ignorance ; — evils  which  exist  because  the  best  of  us  are 
largely  in  ignorance  of  the  true  principles  of  civil  govern- 
ment and  social  science.  But  under  the  delusion  that  our 
social  and  political  institutions  are  perfect,  or  nearly  so, 
they  mistake  these  phenomena  for  the  inevitable  results  of 
human  association  under  all  possible  circumstances.  The 
symptoms  of  a  diseased  social  condition  have  been  mistaken 
for  those  which  would  appear  in  perfect  political  and  social 
health. 

POLITICAL  ECONOMY  IS  AN  IMPERFECT  SCIENCE. 

The  pretense  is  virtually  made  that  Political  Economy 
has  reached  a  point  where  it  can  be  called  a  perfect  science. 
A  science  is  a  methodical  arrangement  of  facts  and  of 
principles  deduced  from  those  facts  relating  to  a  particular 
subject.  A  science  is  perfect  in  proportion  to  the  extent 
that  all  the  facts  and  principles  relating  thereto  are  fully 
and  accurately  known.  The  sciences  of  law  and  medicine 
have  been  studied  and  written  upon  for  thousands  of  years 
by  the  ablest  men  of  every  generation.  They  are  con- 
stantly advancing  but  are  still  full  of  imperfections,  and  in- 
stead of  claiming  that  they  are  perfect,  the  most  eminent 
lawyers  and  physicians  are  foremost  in  pointing  out,  and  in 
attempting  to  remedy,  the  defects  of  those  sciences.  But 
political  economy  is  not  an  ancient  study.  The  first  syste- 
matic book  on  that  subject  was  published  by  Adam  Smith, 
in  1776.  The  next  most  important  work  was  written  by 
David  Ricardo,  in  181 7.  Political  economy  embraces  a 
wide  range  of  facts  and  principles.  It  deals  largely  with 
that  most  complex  of  all  things,  human  nature,  and  its 
manifestations  and  tendencies  under  certain  conditions.  It 
is  not  only  a  comparatively  new  science,  but  its  study  has 
hitherto  engaged  the  attention  of  a  relatively  small  num- 


FALSE  PRETENDERS.  y 

ber  of  competent  persons.  Its  few  students  differ  widely 
in  some  of  their  conclusions,  and  many  of  its  principles  are 
in  controversy.  Therefore  the  air  of  perfect  knowledge  as- 
sumed by  a  few"  Professors"  who  have  thrust  themselves 
before  the  public  as  infallible  authorities  on  this  subject  is 
ridiculous.  *  The  great  majority  believe  that  the  subject  of 
national  finance  is  entirely  different  from  other  business 
matters,  and  governed  by  obscure  and  complex  laws  pecul- 
iar to  itself.  This  error  has  been  created  and  fostered 
chiefly  by  school-masters  and  bankers,  who  find  a  profit  in 
such  a  public  belief.  In  a  variety  of  ways  every  one  of 
those  persons  is  frequently  saying  in  substance  : 

*'  The  masses  of  the  people  can  never  understand  the  cur- 
rency question,  because  its  literature  is  so  extensive  and  pro- 
found that  years  of  careful  study  are  required  for  its  com- 
prehension. But  only  look  at  me :  I  am  a  very  learned 
man.  I  have  studied  this  matter  for  many  years  and  under- 
stand all  its  deep  mysteries.  Now,  as  it  is  impossible  for 
you  to  grasp  the  profound  and  peculiar  principles  which 
underlie  the  financial  question,  I  will  tell  you  what  to  be- 
lieve. If  not  so  instructed,  I  am  afraid  you  will  take  some 
political  action  which  will  injure  yourselves." 

By  a  singular  coincidence  these  benevolent  pieces  of  wis- 
dom invariably  direct  the  people  to  adopt  the  line  of  policy 
which  favors  their  author's  personal  interest.  Most  of 
those  who  write  financial  articles  pretend  to  be  possessors 
of  a  vast  amount  of  undivulged  learning.  They  do  not 
say  :  "  I  am  stating  the  principles  of  finance  as  far  as  I  un- 
derstand them."     They  continually  talk  about  stating  the 

*  A  considerable  proportion  of  so-called  "  economists  "  are  clergy- 
men, \Vho  have  quit  preaching  the  sublime  unselfishness  of  the  Nazarene, 
and  engaged  in  the  business  of  proclaiming  doctrines  pleasanter  to  rich 
and  privileged  listeners.  To  this  more  congenial  task  they  have  mostly 
brought  mental  peculiarities  which  place  them  in  affiliation  with  the  ma- 
jority of  other  "  economists  "  ;  viz.,  greater  love  of  dogmas  than  of  truth, 
and  the  inveterate  habit  of  assuming  statements  true,  without  examina- 
tion or  evidence,  and  then  basing  arguments  upon  them  as  if  the  prem- 
ises of  the  reasoning  had  been  established. 


g  SOCIAL  STRUGGLES. 

elementary  principles  of  finance  and  refer  to  the  "  conclu- 
sions arrived  at  by  those  who  have  fully  explored  the  sub- 
ject." 

The  insinuation  is  constantly  made  that  what  is  stated  is 
merely  a  fragment  of  great  learning,  and  that  every  asser- 
tion contained  therein  is  sustained  by  a  mass  of  knowledge 
unknown  to  the  public. 

A   CONFESSION. 

As  a  full  confession  is  said  to  be  good  for  one's  soul,  I 
admit  once  supposing  the  above-named  and  kindred  state- 
ments to  be  true.  What  was  stated  seemed  so  contrary  to 
common  sense  that  I  failed  to  understand  how  it  could  be 
true,  but  supposed  this  arose  from  ignorance  of  undisclosed/ 
facts  and  principles.  Impelled  by  a  curiosity  to  know  just 
what  the  hidden  depths  alluded  to  were,  I  carefully  ex- 
amined the  writings  of  those  called  masters  of  this  occult 
science,  and  found  that  an  old  artifice  had  been  repeated. 
In  all  ages  of  the  world,  jugglers,  priests  and  necromancers 
of  various  kinds  have  attempted,  and  generally  successfully, 
to  magnify  their  own  importance  and  accomplish  their  pur- 
poses by  raising  a  smoke  and  affecting  a  special  knowledge 
of  some  wonderful  mystery.  To  this  old  trick  I  found 
myself  the  victim. 

Since  that  time,  whenever  I  see  a  man  styling  himself  a 
"  scientific  financier  "  and  telling  his  hearers  or  readers  to 
defer  to  his  wonderful  attainments,  I  smile  at  the  memory 
of  my  own  deception  and  say  to  myself  :  This  person  has 
put  on  his  paint  and  feathers  and  is  practicing  the  tactics  of 
an  Indian  Medicine  Man.  Exteriorly  he  is  a  "  scientist  "  ; 
remove  his  outer  garments,  dig  a  little  into  his  pretensions, 
and  a  charlaian  is  exposed  to  view.  Directly  or  indirectly, 
he  is  getting  pay  for  practicing  an  imposition  on  the  public. 
The  mysteries  he  pretends  to  possess  a  knowledge  of  do 
not  exist. 


THE  SIMPLICITY  OF  NA  TURK. 


IGNORANCE   IS   THE    MOTHER   OF   CREDULITY. 

We  are  born  credulous.  We  naturally  believe  whatever 
is  told  us  until  knowledge  and  experience  teach  us  better. 
We  start  in  life  believing  in  the  truthfulness  of  all.  If  we 
live  to  mature  age,  we  are  convinced  that  the  world  is  full 
of  liars.  Ignorance  and  credulity  are  born  every  day. 
Knowledge  and  experience  are  daily  dying.  Thus  a  new 
crop  of  victims  for  imposters  continually  comes  forward. 

Each  individual's  life  is  a  miniature  picture  more  or  less 
perfect  of  the  passage  of  the  world  from  ignorance  and 
superstition  toward  knowledge  and  free  enlightened  thought. 

Just  in  proportion  to  their  ignorance,  mankind  are  filled 
with  the  idea  that  many  things  possess  supernatural  qualities, 
and  that  unusual  events  are  produced  by  a  miraculous  force. 
As  they  become  enlightened  they  cease  to  believe  in  ghosts, 
hobgoblins  and  witchcraft  ;  they  gradually  see  the  folly  of 
supposing  that  the  Creator  made  his  works  so  imperfectly 
that  he  finds  it  necessary  to  exercise  a  fitful  and  irregular 
supervision  over  them;  and  finally  they  recognize  the  sim- 
plicity of  events.  Nature  grants  no  charters,  and  enacts  no 
special  or  private  laws.  None  of  her  decrees  can  be  evaded. 
She  is  utterly  relentless  toward  all  who  attempt  to  defy  her 
mandates,  and  has  no  Court  of  Pardons  where  special  inter- 
position can  be  hoped  for.  Her  laws  are  so  general  that  they 
apply  with  rigid  and  impartial  severity  to  every  subject  and 
thing  on  earth,  and  so  far  as  we  know,  to  all  the  planets  in 
the  heavens.  Strictly  speaking,  it  is  impossible  to  break  a 
natural  law.  We  can  easily  get  broken  ourselves  in  trying 
it,  but  the  law  remains  unchanged. 

Until  a  comparatively  recent  time  astronomers  supposed 
that  an  elaborate  mechanism  held  the  heavenly  bodies  in 
place  and  produced  their  movements  ;  but  they  could  never 
conceive  of  anything  complex  enough  to  explain  all  the  facts, 
and  their  theories  melted  away  when  a  few  men  thought  for 
themselves, — saw  the  folly  of  generation  after  generation  who 
had  blindly  trod  in  each  other's  footsteps,  and  showed  that 


lO  SOCIAL  STRUGGLES. 

thousands  of  circling  worlds  were  maintained  by  the  simple, 
all-pervading  law  of  gravitation. 

The  physician  of  the  tenth  century  saw  one  or  more  spe- 
cial demons  in  nearly  every  patient.  He  imagined  that  the 
majority  of  diseases,  especially  all  malignant  ones,  were  the 
result  of  the  machinations  of  witches  or  other  evil  minded 
and  strange  spirits.  Therefore  he  concluded  that  equally 
peculiar  and  mysterious  remedies  were  needed  for  each  dis- 
tinct malady.  A  bold  pretense  of  the  possession  of  occult 
art  was  the  special  thing  which  commended  him  to  an  igno- 
rant and  credulous  people.  The  more  profound  his  ignorance, 
the  greater  the  confidence  reposed  in  him. 

Medical  science  has  developed  by  slow  and  painful  steps. 
Both  physicians  and  patients  have  fondly  clung  to  methods 
which  now  seem  almost  incredible.  But  each  century  has 
witnessed  the  reluctant  flight,  never  to  return,  of  some  pre- 
posterous error  or  some  peculiar  demon.  Especially  during 
the  last  century  has  a  growing,  positive  knowledge  sup- 
planted the  hidden  and  strange  by  the  known  and  familiar. 
When  examining  a  patient  the  physician  now  sees  universal 
laws  at  work  ;  instead  of  a  particular  devil  he  now  discerns 
what  disordered  functions  the  remedial  forces  of  nature  are 
trying  to  restore  to  their  normal  condition.  He  no  longer 
attempts  to  work  a  special  and  miraculous  cure,  but  guided 
by  fixed  general  principles  he  seeks  to  assist  the  natural 
forces. 

Comparative  anatomy  and  physiology  have  shown  that  the 
Great  Architect  did  not  make  a  special  design  when  he 
created  man.  He  merely  added  a  few  lines  to  the  working 
drawings  whereby  the  fish,  the  bird,  and  the  beast  were 
wrought  out  and  given  the  functions  and  faculties  which 
maintain  their  existence.  One  general  plan  and  idea  ap- 
pears to  run  through  all  forms  of  life  from  the  lowest  to  the 
highest.  One  general  system  of  simple  laws  governs  all  their 
physiological  functions,  and  all  their  diseases  have  charac- 
teristics in  common. 

Every  partially  successful  attempt  to  draw  aside  the  cur- 
tain which  hides  nature's  secrets  has  always  surprised  us  in 


MAiVA'IND  HA  TE  TO   THINK.  1 1 

the  same  direction  ;  viz.,  wonder  at  finding  an  unlooked-for 
simplicity.  The  discovery  that  light,  heat,  motion,  and 
electricity  are  all  different  forms  and  manifestations  of  the 
same  force  warrants  us  in  supposing  that  the  future  has 
greater  surprises  in  store  for  us,  and  all  of  them  revelations 
of  the  general  and  simple  character  of  nature's  laws. 

Facts  and  illustrations  showing  that  nature's  laws  are  gen- 
eral, and  that  we  believe  in  the  special  and  miraculous  in 
proportion  to  our  ignorance,  could  be  cited  and  employed 
indefinitely. 

The  foregoing  considerations  explain  why  such  a  multi- 
tude of  persons  have  been  led  to  believe  that  money  pos- 
sesses supernatural  qualities.  Such  beliefs  vanish  whenever 
a  moderate  amount  of  careful  study  is  bestowed  on  finance. 

THE   PLAIN   TRUTH. 

The  fact  is  that  a  man  can  understand  the  money  ques- 
tion without  being  possessed  of  superior  ability,  and  without 
devoting  years  to  its  study.  To  many  persons  the  most 
difficult  thing  is  to  get  rid  of  previously  acquired  supersti- 
tions and  errors.  There  is  nothing  obscure  or  difficult 
about  it  and  there  are  no  mysterious  laws  which  specially 
preside  over  money.  The  value  of  money  is  regulated  by 
precisely  the  same  laws  that  regulate  the  value  of  steel, 
coal,  wheat  and  every  other  article  bought  and  sold  in  the 
markets.  In  considering  money  we  should  use  the  same 
business  principles  and  common  sense  that  we  apply  when 
we  form  a  judgment  about  any  other  subject  or  thing. 
History  shows  clearly  that  the  numerous  errors  and  whimsi- 
cal notions  into  which  individuals  and  nations  have  fallen  in 
regard  to  money  have  been  chiefly  caused  by  assuming  that 
money  was  controlled  by  such  extraordinary  laws  that  plain 
common  sense  and  judgment  were  of  no  use  in  forming  an 
opinion  about  it. 

WHY   MANKIND    MAKE   SUCH    SLOW   PROGRESS. 

There  is  nothing  peculiarly  difficult  about  the  study  of 
social  questions.     But  the  same   lion   in  the  way  that   has 


12 


SOCIAL  STRUGGLES. 


always  retarded  human  progress  in  every  direction  of 
thought  and  effort,  stands  grimly  in  the  path  leading  to  cor- 
rect ideas  and  information  about  economic  subjects. 

This  terrible  beast  is  the  difficulty  we  all  have,  more  or 
less,  in  changing  the  beliefs  acquired  in  infancy.  Early  im- 
pressions and  prejudices  are  most  lasting.  Children  are 
naturally  credulous.  But  although  credulity  is  a  normal 
trait  of  children,  it  forms  in  adults  a  defect  of  character 
which  in  every  age  has  wrought  most  mischievous  and  dis- 
astrous results. 

Each  generation  is  the  child  of  its  ancestors  and  the 
parent  of  the  next  generation.  The  father  teaches  the  son 
and  the  son  soon  becomes  a  father  and  a  teacher.  Errors 
are  thus  handed  down  from  age  to  age  without  ever  being 
examined  by  their  believers.  Whoever  investigates  them 
and  exposes  their  falsity  is  called  a  disturber  of  the  public 
peace. 

A  great  majority  of  the  community  frequently  declare 
themselves  "  shocked  "  at  what  they  hear  or  read.  One 
man  is  shocked  by  a  proposition  to  pass  a  new  law  or  to 
repeal  an  old  one.  Another  is  shocked  at  some  radical 
political  idea  and  another  is  shocked  at  some  new  doctrine 
in  regard  to  the  temperance  question,  or  the  proper  mode 
of  treating  criminals.  One  person  is  shocked  at  what  gives 
pleasure  to  another,  and  the  man  who  is  delighted  with  one 
"shocking"  sentiment  is  often  shocked  himself  by  some 
idea  not  half  so  radical  and  startling  as  the  one  that  pleased 
him. 

A  society  of  eminently  respectable  and  well-disposed  peo- 
ple may  for  a  long  time  hear  preached  some  ancient  but 
false  religious  doctrine  whose  tendency  is  to  degrade  and 
debase  the  mind  and  character  of  all  who  believe  it.  They , 
are  not  shocked  to  hear  this  pernicious  doctrine  repeated 
week  after  week.  But  some  day  they  hear  a  man  who  be- 
lieves it  his  duty  to  publicly  pronounce  the  old  faith  a  libel 
on  the  Deity  and  a  poisonous,  stifling  cloud  on  the  mind  of 
every  person  who  entertains  it. 

Forthwith  a  hum  is  heard,  like  that  of  a  swarm  of  angry 


CONCEIT  AND  COWARDICE. 


13 


bees.  The  hearers  are  fearfully  "  shocked  "  and  the  query 
is  :  What  shocked  them  ? 

They  were  not  shocked  because  a  groveling  superstition 
had  been  believed.  The  fact  that  a  certain  doctrine  was 
spoken  ill  of  was  the  apparent,  but  not  the  real,  cause  of 
their  disquietude. 

They  were  shocked  simply  because  their  habitual  train 
of  thought  was  disturbed,  and  because  they  were  forced  to 
suddenly  consider  a  new  idea.  The  average  man  can  be 
"  shocked  "  at  any  time  by  suddenly  thrusting  a  new  idea 
at  him,  and  it  makes  but  little  difference  to  what  subject 
the  new  idea  relates,  provided  an  implicit  belief  therein  ap- 
pears to  him  important. 

ORIGINAL    THOUGHT   IS   NOT   COMMON. 

Independent  thought  is  so  painful  to  the  majority  of 
mankind  that  comparatively  few  persons  have  original 
thoughts  or  ideas.  They  believe  what  they  have  been 
taught  when  children,  and  what  their  associates  regard  as 
truth.  When  an  idea  is  once  in  their  heads  they  adhere  to 
it  with  the  utmost  tenacity,  not  so  much  because  they  love 
the  old  idea  as  because  they  dislike  to  consider  a  new  idea, 
— they  hate  to  think.  It  is  a  disagreeable  process  for  them 
to  investigate  a  subject — to  find  that  their  old  belief  was 
wrong,  and  to  be  forced  to  accept  a  new  one.  It  is  dilTfi- 
cult  for  them  to  abstractly  ask  the  simple  question,  whether 
the  old  or  the  new  idea  be  the  truth  ?  They  have  a  shrink- 
ing fear  of  such  a  question.  The  old  idea  is  associated  in 
their  minds  with  existing  laws,  institutions  and  customs, 
and  they  feel  a  sense  of  safety  in  having  it  remain  undis- 
turbed. 

Even  if  convinced  that  the  new  idea  is  true,  they  dread 
the  consequences  of  its  diffusion,  and  have  a  vague  horror 
of  its  effect  upon  themselves  or  upon  society.  In  fact, 
more  confidence  is  felt  in  existing  beliefs  and  institutions 
which  they  are  convinced  are  wroiag,  than,  in  an  abstract 
idea  which  they  are  satisfied  is  right. 

No  one  can  read   the  history  of    his   kind  without   being 


14 


SOCIAL  STRUGGLES. 


amazed  at  the  almost  incredible  stupidity  which  has  char- 
acterized every  age  and  nation.  We  wonder  why  certain 
acts  were  done,  when  a  better  course  would  have  been  so 
much  easier,  and  all  explanations  are  futile  until  we  remem- 
ber that  by-gone  generations  had  precisely  the  same  pro- 
clivities and  were  as  cowardly  as  the  men  now  living  ;  they 
trod  in  the  footsteps  of  their  ancestors  ;  they  did  not  im- 
agine they  could  be  radically  mistaken,  that  much  remained 
to  be  learned,  and  above  all,  they  abhorred  the  labor  of 
thinking. 

The  human  race  has  progressed  so  slowly  because  nearly 
every  one  has  been  educated  to  consider  true  whatever 
opinion  was  held  by  the  great  majority,  and  to  reject  as 
false  whatever  ideas  were  advanced  by  a  small  minority. 

In  all  social  and  political  problems  the  aversion  of  the 
great  majority  to  new  ideas  is  a  potent  factor.  Without 
recognizing  it  we  cannot  rightly  estimate  how  far  the 
efTect  of  laws  of  comparatively  recent  enactment  has  been 
modified  by  pre-existing  prejudices  ;  neither  can  an  opinion 
of  any  value  be  formed  concerning  the  probable  influence 
which  any  proposed  change  in  law  or  custom  would  exert 
within  a  few  years'  time. 

MANKIND    PREFER   OLD   TO  NEW  THINGS. 

Whoever  im.agines  that  even  the  most  intelligent  com- 
munity stands  ready  to  immediately  accept  and  profit  by  a 
new  and  more  truthful  idea,  a  wiser  law,  or  a  better  custom, 
and  hazards  his  personal  welfare  on  such  a  supposition, 
will  find  himself  wofully  mistaken. 

The  inertia  of  mankind  keeps  trade  in  accustomed 
channels  long  after  better  and  cheaper  goods  can  be  ob- 
tained from  .a  new  source.  Trade-marks  become  valuable 
after  long  use,  largely  because  people  have  acquired  the 
habit  of  using  goods  with  a  particular  brand,  and  dislike  to 
change.  An  old  college,  or  school  of  any  kind,  will  have 
more  pupils  than  an  equally  good  new  one.  People  em- 
ploy the  old  doctor  long  after  a  younger  and  better  one  has 
moved  into  the   adjoining  house.     The  old   tool  is   not  at 


REPRODUCTION  OF  EVIL. 


15 


once  superseded  by  the  improved  one.  A  newly  invented 
machine  must  have  extraordinary  merit  to  insure  its  speedy 
adoption.  A  kind  of  money  with  which  a  community  has 
long  been  familiar  will  be  received  in  preference  to  a  more 
convenient  but  new  form  of  currency.  Old  customs  and 
old  modes  of  conducting  the  various  affairs  of  life  are  fol- 
lowed long  after  the  superiority  of  new  ones  has  been 
demonstrated  thousands  of  times. 

The  benefit  w^iich  a  community  or  nation  would  other- 
wise derive  from  a  wise  reform  of  any  kind  may  be  largely 
nullified  for  a  long  period  by  an  inveterate  prejudice  against 
it.  In  considering  whether  an  innovation  is  advisable  at  a 
certain  time,  it  is  well  to  inquire  how  far  it  will  meet  the  ap- 
proval of  society.  Food  must  be  digested  before  it  nour- 
ishes an  animal ;  anci  laws  and  the  majority  of  people  gov- 
erned by  them  must  assimilate  before  any  measure  can  be 
fairly  and  fully  tested. 

EVILS  PERPETUATE  THEMSELVES. 

The  poet  tells  us: 

"  The  evil  that  men  do,  lives  after  them." 

This  is  a  brief  and  poetic  mode  of  stating  the  fact  that 
the  evils  generated  by  bad  legislation  exist  long  after  the 
repeal  of  their  primary  cause.  The  wounds  and  social 
diseases  of  society  heal  very  slowly,  from  the  fact  that  the 
characteristics  of  a  people  stunted  and  degraded  by  the  long 
continued  deprivation  of  liberty  and  opportunities  of  social 
and  intellectual  improvement,  are  transmitted  to  the  next 
generation.  If  the  ill  effects  of  long  carrying  a  heavy  burden 
disappeared  as  soon  as  the  grievous  weight  is  removed,  a 
nation  steeped  in  stolid  ignorance  could  at  once  be  trans- 
formed and  elevated  by  substituting  good  for  evil  laws. 
But  under  the  most  favorable  practicable  conditions  it  would 
require  a  long  time  to  transmute  the  millions  of  Russian 
and  Turkish  peasants,  for  example,  into  such  self-re- 
specting, intelligent  and  thrifty  freemen  as  the  farmers  of 
Central  New  York. 


J 5  SOCIAL  STRUGGLES. 

Marks  of  the  grinding  despotism  to  which  the  French 
peasantry  were  subjected  prior  to  the  French  revolution  still 
exist.  The  fact  that  for  centuries  the  laborers  of  England 
have  borne  a  cruel  injustice  accounts  for  much  in  their  con- 
dition and  character  to-day.  The  discontent  of  Ireland  is 
not  simply  the  result  of  existing  laws ;  back  of  them  lie 
the  results  of  five  hundred  years  of  oppression,  with  a  swarm 
of  bitter  memories.  The  passions  aroused  by  the  conflict 
which  occurred  over  a  century  ago  between  England  and  the 
United  States  have  not  yet  subsided  ;  the  embers  smolder, 
but  are  still  warm  and  could  easily  be  fanned  into  a  fierce 
blaze.  Many  supposed  that  all  the  angry  feelings  attendant 
on  the  bloody  war  which  raged  in  this  country  from  1861  to 
1865  would  speedily  disappear  after  Appomattox.  But  our 
dissensions  will  not  be  healed  until  after  every  actor  in  that 
great  drama  is  beneath  the  sod,  and  ugly  scars  will  remain 
long  afterward.  The  American  people  did  not  properly  ap- 
preciate that  the  evils  of  slavery  would  remain  long  after 
every  negro  had  been  declared  a  freeman.  And,  at  this  day, 
it  is  not  fully  realized  that  the  people  of  the  Southern 
States  must  needs'  for  a  long  time  be  under  the  influence  of 
the  same  forcfes  that  create  and  guide  public  opinion  in  the 
Northern  States  before  we  can  be  as  united,  as  a  nation,  as 
one  of  the  States  is  united  as  a  State.  All  social  or  politi- 
cal measures  taken  without  reference  to  this  must  largely  be 
failures. 

NEED    OF    ELEMENTARY   STUDY. 

In  concluding  this  chapter,  the  reader's  attention  is  called 
to  a  simple  matter  of  great  importance.  That  is,  the  gener- 
ally overlooked  fact  that  it  is  utterly  impossible  to  ever  un- 
derstand any  subject,  no  matter  how  plain  or  simple  it  may 
be,  without  first  becoming  master  of  its  elementary  princi- 
ples. We  must  learn  the  alphabet,  else  we  can  never  read. 
We  must  learn  to  add,  to  subtract,  to  multiply  and  to  divide 
before  we  can  understand  arithmetic. 

Furthermore,  we  can  never  acquire  a  full  knowledge  of 
anything  unless  our  ideas  about  its  first  principles  are  cor- 


NEED  OF  CORRECT  PREMISES. 


17 


rect.  Our  premises  must  be  right.  If  the  first  step  be  taken 
in  the  wrong  direction,  no  matter  how  long  we  walk  without 
turning  we  shall  not  reach  the  place  where  we  wish  to  go. 
We  must  carefully  sift  the  truth  from  the  falsehood.  Stu- 
dents of  astronomy  never  reached  the  truth  so  long  as  they 
started  with  the  premise  that  the  sun  moved  round  the 
earth. 

At  railroad  centres  several  trains  are  often  seen  moving 
along  in  the  same  direction  on  the  same  track.  Soon  one 
train  gradually  diverges  from  its  first  course,  makes  a  long 
graceful  curve  and  moves  westwardly.  Another  train  keeps 
on  due  northerly ;  while  a  third  train  departs  from  its  first 
direction  by  a  broad  sweep  and  goes  easterly.  These  differ- 
ent movements  are  caused  by  an  instrument  called  a  switch. 
The  deflection  caused  by  it  is  so  slight  at  first  that  the  ob- 
server with  his  eyes  fixed  upon  the  train  usually  fails  to 
note  the  precise  point  where  the  divergence  began.  If  a 
train  is  once  switched  upon  the  wrong  track  no  amount  of 
speed  or  length  of  time  will  bring  it  to  its  destination.  It 
can  only  be  got  to  the  proper  place  by  taking  it  back  to  the 
switch  and  putting  it  on  the  right  track. 

What  a  switch  is  to  a  railroad  train,  elementary  principles 
are  to  a  student  of  any  of  the  problems  of  political  economy. 
Unless  he  start  right,  unless  he  have  clear  and  correct  fun- 
damental ideas,  no  amount  of  time  or  study  will  enable  him 
to  understand  those  topics.  Years  of  study  will  only  add 
confusion  to  his  mind  and  lead  him  farther  from  the  truth. 
Of  necessity,  his  opinion  on  any  point  is  utterly  worthless. 

The  same  thing  is  true  of  the  study  of  all  other  subjects. 
History  presents  many  examples  of  generation  after  genera- 
tion of  diligent  students  and  learned  men,  all  pursuing  the 
same  study  or  profession  without  reaching  the  truth.  In 
the  outset  of  their  studies  they  assumed  that  the  primary 
principles  taught  by  their  predecessors  were  true,  when  in 
fact  they  were  false. 


ig  SOCIAL  STRUGGLES. 

TERRIBLE    FRUITS    OF   FALSE    PREMISES. 

A  large  portion  of  history  is  occupied  with  the  revolting 
story  of  bloody  religious  wars  and  cruel  persecutions  on  ac- 
count of  religious  belief.  This  appalling  amount  of  wrong 
and  suffering  can  all  be  traced  to  the  false  premise  stated  in 
one  sentence,  viz.,  "Free  thought  on  religious  topics  is  a 
crime."  This  premise,  believed  true,  made  the  forcible  at- 
tempts of  men  to  suppress  all  religious  opinions  at  variance 
with  their  own  just  as  logical  and  inevitable  a  sequence  as 
their  efforts  to  repress  theft  were  a  logical  result  of  a  belief 
that  theft  was  a  crime.  The  faulty  premise  was  the  foun- 
tain from  which  a  multitude  of  other  errors  flowed.  The 
great  historian,  Lecky,  has  shown  us  how  naturally  relig- 
ious persecutions  began  when  said  premise  was  believed  true, 
and  how  impossible  for  them  to  exist  whenever  said  prem- 
ise was  believed  false. 

For  century  after  century  medicine  was  studied  from  the 
standpoint  of  supposing  that  the  arteries  were  filled  with 
air.  Thousands  of  similar  examples  could  be  cited,  all  show- 
ing that  our  ancestors  often  got  on  the  wrong  track,  and 
never  reached  the  desired  point  until  they  went  back  to  the 
switch,  sifted  out  the  truth  and  started  from  correct  prem- 
ises. Mankind  have  rarely  taken  a  forward  step  in  the 
shortest,  simplest  and  easiest  manner.  False  premises  have 
almost  invariably  led  them  to  take  the  longest  and  most  dif- 
ficult route  to  reach  a  point  which  might  have  been  attained 
by  one  easy  step. 


CHAPTER  II. 

What  is  Money? — Its  Functions;  very  Important  that  all  should  Under- 
stand.— Prevalent  Ideas  about  Money. — False  Dogmas  by  the  Mill- 
ion.— How  the  People  came  to  be  Misled. 

By  artifice  and  corruption,  measures  based  on  false  pritici- 
ples  may  be  imposed  Jipon  a  misguided  people.  But  success  so 
procured  can  only  be  temporaiy.  Sooner  or  later  the  tmth 
zvill  be  discovered,  ivrongful  legislation  ivill  be  repealed, 
and  its  authors  and  abettors  zvill  be  stigmatised  as  crafty  char- 
latans, or,  at  least,  as  men  ignorajit  of  the  subject  upon  which 
they  presume  to  enact  lazvs. 

This  is  one  of  the  most  important  practical  questions  in 
political  economy,  for  its  answer  largely  decides  the  na- 
tional financial  policy.  This,  many  persons  suppose,  is  a 
matter  of  little  personal  concern  to  them  ;  but,  in  fact,  the 
prosperity  of  every  individual  is  either  helped  or  hindered 
more  or  less  by  it.  Persons  of  small  means,  and  those  who 
work  for  day  wages,  generally  suffer  relatively  more  from 
an  erroneous  policy  than  those  in  affluent  circumstances. 
Therefore  every  primary  fact  and  principle  relating  to 
money  should  be  slowly  and  carefully  dissected  and  under- 
stood before  trying  to  take  a  step  in  advance  of  this  ABC 
of  financial  knowledge. 

PREVALENT   IDEAS   ABOUT   MONEY. 

In  the  first  place  let  us  try  to  get  a  clear  view  of  the 
beliefs  about  money  which  are  generally  accepted  as  true. 
This  will  prepare  the  road,  and  the  reader  will  then  be 
better  ready  to  take  up  the  subject  of  money  at  its  root  and 
trace  it  upward.  Perhaps  this  can  be  done  most  easily  by 
reciting  the  history  of  some  of  the  efforts  which  have  recent- 
ly been  made  in  this  country  to  define  the  term  "  Money," 
and  by  stating  some  of  the  results  flowing  from  those 
efforts. 

19 


20 


SOCIAL  STRUGGLES. 


From  1865  to  1879  ^^"^^  statement  was  made  and  printed 
millions  of  times  that  greenbacks  were  not  money,  and  that 
nothing  was  or  could  be  money  but  coins  made  of  gold  or 
silve'r.  Beginning  with  Bonamy  Price,  "  scientific  finan- 
ciers"  made  speeches  in  all  the  principal  cities,  in  which 
they  asserted,  with  the  assured  air  of  persons  confident  of 
superior  wisdom,  that  trade  could  not  properly  be  carried 
on  without  money ;  that  it  was  impossible  to  make  money 
out  of  paper,  and  that  therefore  the  only  financial  salvation 
of  the  country  lay  in  burning  the  greenbacks  and  using 
gold  and  silver  in  their  stead. 

The  question  was  triumphantly  asked  :  "  How  can  a  man 
pay  his  debts  without  money  ?  "  Then  the  sad  fate  of  a  peo- 
ple unable  to  pay  their  debts,  because,  although  rich,  they 
had  no  money,  was  depicted  and  bemoaned,  and  the  audi- 
ence were  pathetically  exhorted  to  rid  themselves  of  pieces 
of  rags  and  get  real  money. 

One  eloquent  "Professor"  was  taken  from  Massachu- 
setts and  carried  from  place  to  place  throughout  the  West- 
ern States,  in  order  that  he  might  have  a  better  chance  to 
cry  out  to  the  farmers  : — 

"  For  many  weary  years  you  have  been  cheated  and  plundered.  You 
have  sold  your  produce  and  have  received  no  money  in  payment — you 
have  been  swindled  with  worthless  rags  ;  rags  with  which  values  cannot 
be  measured,  and  therefore  you  do  not  know  how  much  value  you  get  for 
your  grain,  nor  how  much  you  pay  for  what  you  buy  in  exchange.  It  is 
now  time  for  you  to  sternly  demand  the  money — the  solid  coin — before 
you  part  with  your  hard-earned  products." 

These  so-called  high  authorities  told  us — 

"  that  as  the  function  of  money  was  to  measure  value,  it  could  not  dis- 
charge its  functions  unless  it  possessed  intrinsic  value.  As  a  bushel 
measure  must  have  capacity  in  order  to  measure  volume,  and  a  yard- 
stick have  length  in  order  to  measure  length,  so  money  must  have  value 
in  order  to  be  a  measure  of  value.  Value  must  be  an  inherent  quality  of 
money,  just  as  sweetness  is  an  inherent  quality  of  sugar.  Therefore 
nothing  is  money  unless  the  raw  material  from  which  it  is  made  is 
worth  as  much  as  the  completed  coin.  The  government  stamp  on  a 
coin  of  gold  or  silver  adds  nothing  to  its  value— it  merely  certifies  its 


MYSTERIOUS  EFFECT  OF  GOLD.  21 

weight  and  fineness  ;  i.  e.,  the  inscription  states  the  amount  of  intrinsic 
value  contained  in  it. 

"  Moreover,  it  is  impossible  for  the  stamp  of  the  government  on  any- 
thing to  add  any  value  to  it  which  it  did  not  possess  before.  A  law  de- 
claring any  piece  of  paper,  or  even  any  coin  of  gold  or  silver,  to  be 
money,  and  stating  its  legal-tender  value,  does  not  add  one  particle  of 
real  value  to  it.  Legal-tender  money,  therefore,  has  no  actual  value 
whatever,  except  the  intrinsic  value  of  the  materials  from  which  it  is 
made.  In  case  of  paper  currency,  this  intrinsic  value  is  just  what  a 
paper  manufacturer  will  pay  for  this  spurious  money  to  grind  into  pulp. 
Greenbacks,  therefore,  are  only  really  worth  what  they  will  bring  by  the 
.pound  when  sold  as  old  rags. 

"  Wealth  can  only  be  created  by  the  proper  union  of  labor  and  capital. 
Wealth  cannot  be  created  by  legislation.  Paper  currency  is  a  mere  crea- 
tion of  law  and  is  not  wealth.  If  all  the  paper  currency  of  the  country 
M'ere  burned  up  in  a  night,  the  prosperity  of  the  country  would  not  be 
affected  in  the  least.  No  wealth  would  be  destroyed  by  such  a  confla- 
gration beyond  the  value  of  some  paper  rags. 

"  Laws  can  easily  be  enacted  which  will  transfer  wealth  from  one  per- 
son to  another  person,  or  from  one  class  of  persons  to  another  class  of 
persons  ;  but  no  law  ever  did,  or  ever  can,  create  one  particle  of  wealth. 
If  money  and  wealth  could  be  created  by  law,  then  a  government  would 
never  need  to  levy  taxes— it  could  readily  legislate  itself  into  the  posses- 
sion of  both  those  desirable  things  whenever  they  were  needed. 

"  Paper  currency  has  no  utility,  except  to  the  extent  that  it  is  a  conven- 
ient representative  of  real  money.  It  should  be  convertible  at  par  into 
coin  at  all  times,  on  demand  of  its  holder.  Beyond  compelling  banks  of 
issue  to  be  constantly  ready  to  redeem  their  paper  currency  in  coin  on 
presentation,  a  government  has  no  legitimate  right  to  have  anything  to 
do  with  banking.  A  government  should  therefore  never  issue  paper 
currency." 

I  remember  hearing  one  of  these  wise  men  lecture  on 
*'  Money  "  and  say  : — 

"  The  sight  of  gold  produces  a  wonderful,  mysterious  impression  on  the 
human  mind.  When  a  man  has  anything  for  sale  the  sight  of  gold  at 
once  creates  this  sensation  in  his  brain — it  incites  him  to  immediately 
place  the  lowest  possible  price  on  his  goods  in  order  to  get  possession  of 
the  coveted  object,  the  glittering  coin.  Consequently  the  possessor  of 
gold  coins  has  in  hand  an  accurate  measure  by  means  of  which  the  real 
value  of  whatever  he  wishes  to  buy  can  at  once  be  determined.  But  this 
curious  effect  is  not  produced  by  greenbacks,  and  this  is  one  reason  why 
greenbacks  are  not  a  correct  measure  of  value. 

"  It  is  requisite  that  a  pound  weight  should  always  weigh  the  same  ;  that 


22  SOCIAL  STRUGGLES. 

a  bushel  measure  should  always  hold  the  same  quantity  ;  and  that  a  yard- 
stick should  always  have  the  same  length.  In  like  manner,  a  measure  of 
value  should  always  possess  the  same  value ;  otherwise  it  becomes  a 
means  of  deception. 

"  Gold  and  silver,  unlike  other  things,  have  a  fixed,  unvarying  value ; 
consequently  gold  and  silver  are  the  only  things  from  which  a  fixed 
measure  of  value  can  be  made.  Hence  we  find  that  all  civilized  nations, 
in  all  ages,  have  used  gold  and  silver  as  money.  Coins  of  gold  and  silver 
are  the  money  of  the  world.  But  it  must  be  borne  in  mind  that  these 
coins  are  not  capital.  They  are  unvarying  measures  of  value  which  can 
be  exchanged  for  capital." 

FALSE   DOGMAS   BY   THE   MILLION. 

Editorials,  speeches  and  pamphlets,  setting  forth,  in  a  va- 
riety of  forms,  but  all  containing  substantially  the  foregoing 
ideas,  were  printed  in  great  numbers.  The  "  fixed  value  " 
of  gold  and  silver  was  a  point  dwelt  on  with  special  empha- 
sis, and  large  numbers  of  pamphlets  were  written  for  the 
special  purpose  of  setting  forth  the  enormous  advantages 
to  be  derived  from  using  a  "  fixed  measure  of  value":  to 
wit,  gold  and  silver  coins.  That  gold  and  silver  could 
fluctuate  in  value  like  other  commodities  was'  deemed  a 
proposition  so  absurd  as  not  to  demand  refutation. 

The  authors  of  these  statements  claimed  to  represent  the 
most  perfect  scientific  researches,  and  asserted  that  all 
who  differed  from  them  were  profoundly  ignorant,  thor- 
oughly dishonest  ;  or  a  mixture  of  those  undesirable  qual- 
ities. 

It  is  undoubtedly  true  that  by  far  the  greater  portion  of 
the  financial  legislation  of  the  world  originated  from  a  belief 
in  the  truth  of  the  aforesaid  ideas.  If  they  are  correct, 
then  the  legislation  based  on  them  is  correct,  and  we  have 
substantially  reached  perfection  in  finance.  It  also  follows 
that  the  startling  inequality  of  wealth,  the  vast  amount  of 
pauperism,  the  great  fluctuations  in  prices,  the  frequent 
panics  and  periods  of  business  depression,  accompanied  by 
numerous  bankruptcies,  are  all  right  too  ;  they  are  bitter 
but  wholesome  medicines  ;  they  are  an  unavoidable  inci- 
dent of  human  affairs  which  it  is  folly  to  attempt  to 
prevent. 


A  SUDDEN  CHANGE  IN  DOCTRINE.  23 

HOW   THE   PEOPLE   CAME   TO   BE    iNHSLED. 

The  vast  majority  of  the  American  people  had  never 
given  serious  thought  to  the  subject  of  national  finance,  and 
were  easily  persuaded  that  it  was  a  very  intricate  subject, 
and  that  the  "  scientists  "  had  a  monopoly  of  monetary  in- 
formation. Accordingly  they  proceeded  to  translate  their 
beliefs  into  laws  and  actions.  Taught  that  silver  was  a 
"  fixed"  measure  of  value,  one  of  their  earliest  desires  was 
to  get  rid  of  the  evils  and  sufferings  which  they  supposed 
were  inflicted  by  fractional  paper  currency.  Accordingly, 
at  an  expense  of  about  fifty  millions  of  dollars  in  the  outset, 
and  at  a  yearly  cost  of  several  millions  more,  the  fractional 
cui'rency  was  destroyed  and  fractional  silver  coins  put  in 
circulation  with  the  confident  expectation  that  a  "  fixed 
measure"  had  been  substituted  for  a  "  fluctuating  spurious 
money."  But  the  anticipated  benefits  failed  to  appear,  and 
many  persons  observed  that  trade  was  not  conducted  any 
more  easily  or  accurately  than  with  paper  currency. 

Since  that  time  the  "  learned  financiers  "  have  radically 
changed  their  teachings.  Instead  of  saying  that  gold  and 
silver  have  a  "  fixed  value,"  they  now  gravely  inform  us 
that  gold  has  a  "  fixed  "  value  and  that  "  silver  has  become 
a  metal  which  fluctuates  in  value." 

This  repudiation  of  a  doctrine  which  has  long  been  taught 
as  confidently  as  a  mathematical  demonstration  has  puzzled 
many  plain  persons.  They  have  said  to  themselves:  "Sil- 
ver is  precisely  the  same  metal  and  has  exactly  the  same 
qualities  that  it  had  a  thousand  years  ago.  The  nat- 
ural laws  of  to-day  are  the  same  natural  laws  which  have 
always  presided  over  silver.  What,  then,  is  meant  by  the 
statement  that  silver  has  recently  acquired  qualities  which 
it  has  never  hitherto  possessed  ?  Why  does  gold  stand  still 
while  silver  moves  ?  Why  are  times  worse  than  before  the 
prescriptions  of  financial  doctors  were  taken  ?  " 


CHAPTER  III. 

Why  we  use  Money. — What  a  Science  ig. — How  to  study  Money. — What 
Capital  is. — Distinction  between  Wealth-  and  Capital. — No  use  for 
Money  when  no  Wealth  exists. — A  Colony  without  Wealth. — Need 
of  Tools. — Value  of  a  Thing  is  Dependent  on  Circumstances. — The 
Value  of  Land. — Need  of  Capital. — How  Commerce  began. — 
Definition  of  Trade. — How  Trade  is  often  Carried  on. — What  Sim- 
ple Barter  is.— Advantages  of  Direct  Barter. — Mechanism  of  Ex- 
changing Things  by  Use  of  Money. — Who  are  Principals  in  a 
Trade. — Simple  Barter  is  Still  in  Use. — How  Barter  tends  to  Pro- 
duce Fair  Bargains.— Bartering  Labor. — Making  "  Bees." — Growth 
of  Classes. — What  a  Snob  is. — Barter  often  the  Best  Way  to  Trade. 
— Profits  of  Middlemen. — Barter  could  be  Employed  more  than  it 
is. — Best  Test  of  Wages. — Facilities  for  Barter  should  be  Increased. 
— Importance  of  Citizens  being  Acquainted. — Wealth  of  Cities. 
— Facts  in  regard  to  Middlemen. — Parallel  Railroads. — Increase  of 
Middlemen. 

False  premises  always  lead  to  false  conclusions.  No  matter 
how  able  and  ingenious  a  person  may  be,  when  he  makes  an  ex- 
tended statement  in  regard  to  any  subject,  Jie  zuill  inevitably 
contradict  himself,  if  the  premises  from  luhich  he  reasons  are 
incoi'rcct. 

We  have  now,  in  substance,  stated  the  doctrines  of  those 
who  call  themselves  "scientific  financiers"  and  are  gener- 
ally believed  worthy  such  a  title.  But  as  all  history  and  ob- 
servation tell  us  that  a  man  is  not  always  what  he  calls  him- 
self, nor  what  the  majority  believe  him  to  be,  let  us  care- 
fylly  examine  this  matter  ourselves. 

WHAT  A  SCIENCE  IS. 

A  science  is  not  a  compound  of  truth  and  falsehood  and 
a  classification  of  the  principles  deduced  from  such  a  mixt- 
ure. No  doctrines  are  truly  scientific  unless  they  are  the 
product  of  sound  reasoning  from  facts  verified  by  careful 
examination.       Therefore,   before   we    can   certainly   know 

24 


WHY  MONEY  IS  DESIRED. 


25 


whether  a  related  series  of  statements  which  purport  to  be 
"scientific"  are  actually  so,  we  must  first  ascertain  if  the 
premises  be  true.  We  must  examine  the  alleged  founda- 
tion facts  and  see  if  they  actually  exist.  If  we  find  that 
such  facts  have  been  correctly  stated,  we  must  then  consider 
whether  the  reasoning  from  those  facts  has  been  properly 
done.  If  we  find  any  statement  or  theory  which  is  the  re- 
sult either  of  bad  reasoning,  or  at  variance  with  positive 
facts,  we  have  conclusive  proof  that  such  statement  or  the- 
ory is  partially  or  wholly  false.  Moreover,  we  have  reason 
to  suspect  that  the  Vv^hole  fabric  of  the  so-called  science  is 
built  on  foundations  more  or  less  rotten  and  defective. 

HOW   TO    STUDY    MONEY.  • 

A  plow  is  comparatively  a  simple  tool.  But  no  one  can 
fully  understand  the  meaning  of  the  word  "plow  "  without 
carefully  watching  one  in  operation.  He  must  learn  why 
and  how  it  is  used  before  he  thoroughly  knows  what  the 
tool  is  and  why  it  is  made  just  as  it  is. 

The  same  is  true  of  everything.  In  order  to  clearly  un- 
derstand the  meaning  of  the  term  "  money  "  we  must  act 
just  as  we  do  when  we  want  to  fully  understand  anything 
else.  We  must  begin  at  the  bottom  of  the  subject  ;  we 
must  first  learn  the  uses  of  money — why  we  use  it  and  the 
purpose  we  accomplish  by  using  it. 

As  the  chief  use  of  money  is  to  act  as  the  symbol  and  rep- 
resentative of  wealth  and  capital,  those  terms  must  be  un- 
derstood before  the  use  of  money  can  be  comprehended. 
Many  persons  suppose  that  the  labors  and  sacrifices  of  man- 
kind have  for  their  object  the  possession  of  money.  There 
are  a  small  number  of  insane  persons  called  misers,  who 
spend  years  of  hard  labor  and  privation  for  the  sole  purpose 
of  collecting  money  and  fondly  gazing  at  it.  But,  with 
these  few  exceptions,  human  industry  is  not  incited  by  the 
desire  to  obtain  money.  The  first  and  ever  dominant  mo- 
tive to  labor  is  the  imperative  necessity  of  providing  food, 
shelter,  warmth  and  clothing  sufficient  to  maintain  life. 
After  the   actual  necessities  of  man's  animal   life   are   sup- 


26  SOCIAL  STRUGGLES. 

plied,  his  intellectual  and  moral  nature  make  still  further 
demands.  Men  labor  to  supply  the  wants  which  they  have 
in  common  with  the  lower  animals  ;  they  labor  to  obtain 
means  to  gratify  their  emotions,  passions  and  tastes,  and 
they  are  continually  goaded  to  industry  by  an  ever  widen- 
ing circle  of  real  or  fancied  wants.  These  objects  of  human 
endeavor  are  comprised  by  the  term  "wealth." 

The  miner  for  silver  and  gold  has  not  fully  attained  his 
object  when  those  metals  are  in  his  possession.  He  ex- 
changes them  for  a  homestead,  a  farm,  or  such  other  com- 
modity or  thing  as  his  necessities  and  fancy  may  dictate. 

Man's  vanity  continually  prompts  him  to  desire  an  honor- 
able and  prominent  position  among  his  fellows,  and  in  the 
estimation  of  the  majority  such  a  place  is  reached  by  the 
possession  of  a  greater  abundance  and  better  quality  of  the 
necessaries  and  luxuries  of  life.  Wealth  is  also  desired  as  a 
means  of  gratifying  social,  moral,  and  religious  sentiments. 

When  wealth  can  be  obtained  without  money,  men  care 
nothing  for  money.  Beyond  the  small  amount  of  wealth 
absolutely  necessary  to  maintain  life,  men  care  nothing 
for  wealth  whenever  their  desires  can  be  obtained  without 
wealth.  An  office  which  brings  little  money  and  much 
honor  is  eagerly  sought  for.  Human  desires  of  various 
kinds  generate  the  force  which  makes  the  world  a  scene  of 
unceasing  struggles.  Money  is  eagerly  sought  as  a  means 
of  getting  wealth,  and  wealth  is  desired  as  a  stepping-stone 
to  gratify  the  myriad  cravings  of  the  human  mind. 

WHAT  CAPITAL  IS. 

Capital  is  whatever  mankind  use  to  create  and  procure  the 
necessaries  of  life  ;  it  is  the  tool  which  labor  uses  to  make 
wealth.  Capital  is  the  product  of  labor — it  is  labor  put  into 
a  more  or  less  permanent  form — into  something  by  the  use 
and  help  of  which  it  is  easier  to  obtain  food,  clothing,  fuel, 
shelter,  and  other  needs  and  desires  of  men.  Any  tool,  ma- 
chine, agency,  or  thing  which  facilitates  the  creation  of 
wealth,  by  making  labor  more  effective  than  it  otherwise 
would    be,  is  capital  in    the  full  sense  of  the  term.      The 


ADVANTAGES  OF  OWNING  CAPITAL.  27 

crooked  stick  which  our  ancestors  used  centuries  ago  to  pre- 
pare the  soil  for  seed  was  capital  just  as  truly  as  the  steel 
plow  devised  by  modern  science  and  skill. 

Suppose  a  ship's  crew  were  wrecked  on  an  uninhabited  isl- 
and. The  waters  around  them  swarm  with  fish — the  woods 
are  alive  with  birds — but  the  crew  are  in  danger  of  starvation 
because  they  have  no  means  of  killing  either  fish  or  fowl. 
With  great  difficulty  one  man  makes  a  rude  spear,  or  hook, 
wherewith  to  catch  fish.  Another  makes  a  bow  and  arrows 
to  kill  birds.  By  the  aid  of  these  imperfect  tools  starvation 
is  averted.  The  spear,  the  hook,  and  the  bow  are  capital ; 
labor  has  created  capital,  and  capital  has  helped  labor  to  se- 
cure food. 

Without  consciously  making  an  argument,  the  makers  of 
these  tools  have  demonstrated  that  capital  is  the  child  of  la- 
bor and  shown  the  falsity  of  the  dogma  that  "  Labor  can  do 
nothing  without  the  help  of  capital."  In  the  beginning  of 
society  there  was  no  capital.     Labor  had  to  create  it. 

If  the  owner  of  one  of  these  weapons  should  lend  it  in 
consideration  of  receiving  an  equitable  portion  of  the  game 
captured  therewith,  that  would  be  an  example  of  loaning 
capital  at  a  fair  rate  of  interest.  If  the  weapon-owner 
took  advantage  of  the  hunger  of  those  who  had  nothing  but 
their  naked  hands,  and  loaned  the  means  of  catching  game 
for  an  unreasonable  portion  of  the  game,  that  would  be  ex- 
tortion and  usury. 

As  men  progress  from  a  rude  state  of  ignorance  and  pov- 
erty toward  knowledge  and  wealth,  the  forms  of  capital  and 
the  modes  of  collecting  rent  and  interest  become  more  nu- 
merous and  complex  ;  but  the  principle  involved  remains 
the  same  as  in  the  foregoing  simple  examples. 

DISTIXCTION    BETWEEN    WEALTH   AND    CAPITAL. 

In  civilized  communities,  wealth  can  readily  be  exchanged 
for  capital,  and  capital  can  be  exchanged  for  wealth.  In 
many  cases,  the  same  thing  is  both  wealth  and  capital.  A 
farmer's  bin  of  potatoes  is  wealth.  He  can  cook  and  eat 
them.     He  can  also  use  them  to  create  more  potatoes — he 


28  SOCIAL  STRUGGLES. 

can  plant  them,  and  in  that  form  the  potatoes  are  capital ; 
they  assist  the  farmer  to  create  wealth.  A  flock  of  sheep  is 
both  wealth  and  capital.  It  is  capital  when  used  to  produce 
wool  and  raise  lambs.  It  is  wealth  when  used  for  the  flesh 
and  skins. 

But  many  forms  of  capital  are  not  wealth,  simply  because 
they  do  not  and  cannot  directly  supply  man's  wants — they 
are  a  remote  link  in  the  chain  which  carries  wealth  to  man- 
kind. The  tools  and  machinery  by  the  help  of  which 
threshing  machines  are  manufactured  are  not  wealth  but 
simply  capital.  They  help  labor  create  the  machine ;  the 
machine  helps  the  farmer  to  get  the  grain,  and  the  grain  is 
wealth. 

Forms  of  wealth  which  are  not  a  direct  or  indirect  means  of 
helping  labor  to  create  other  wealth,  are  not  capital.  Ele- 
gantly bound  volumes  of  poetry,  fine  paintings,  elaborately 
carved  musical  instruments  and  kindred  things,  are  wealth 
because  they  supply  the  artificial  wants  of  mankind.  But 
they  are  not  usually  tools  or  means  for  creating  other  wealth, 
and  therefore  are  not  capital. 

NO   USE     FOR   MONEY   WHEN   NO   WEALTH   EXISTS. 

Having  defined  wealth  and  capital  we  are  now  ready  to 
consider  why  we  use  money.  The  proper  beginning  of 
such  a  study  is  to  learn  under  what  circumstances  money 
is  not  used. 

In  a  state  of  absolute  poverty  mankind  would  have  no 
use  for  money,  simply  because  they  would  have  neither 
wealth  nor  capital,  and  therefore  nothing  would  exist  which 
they  wanted  to  sell,  to  buy,  or  to  exchange.  Labor  would 
exist,  but  until  it  had  created  some  wealth,  or  some  capital, 
wages  paid  in  money  would  be  of  no  use  to  the  laborer  ;  no 
one  would  want  to  sell  his  labor  for  money  unless  thereby 
his  wants  could  be  gratified. 

The  possible  use  of  money  begins  with  the  acquisition 
of  wealth.  The  richer  a  community  is  the  more  use  it  has 
for  money ;  it   has  more   to   sell   and   wants   to   buy  more. 


WHY  MONEY  HAS  UNDERGONE  CHANGES.  29 

The  poorer  a  community  is,  the  less  use  it  has  for  money; 
it  has  less  to  sell  and  less  ability  to  buy.* 

In  all  probability  mankind  existed  a  long  time  before 
money  would  have  been  of  any  use  to  them,  even  if  they 
had  possessed  what  we  now  deem  the  best  kind  of  money. 
After  sufficient  progress  had.  been  made  to  render  the  use 
of  money  possible,  it  was  probably  a  long  time  afterward 
before  its  utility  was  discovered. 

The  earliest  kinds  of  money  were  like  the  earliest  tools 
of  all  kinds,  rude  and  inconvenient.  As  mankind  have 
painfully  and  at  irregular  intervals  of  time  developed  intel- 
ligence on  all  other  subjects,  so  they  have  slowly  and  fit- 
fully learned  to  improve  their  money,  and  have  invented 
better  modes  of  using  it.  The  history  of  money  is  the 
story  of  man's  progress  from  poverty,  superstition  and 
ignorance  toward  wealth,  liberty  and  knowledge.  To  say 
that  our  present  money  is  perfect  is  equivalent  to  saying 
that  we  have  reached  in  all  respects  the  highest  state  of 
perfection  of  which  the  race  is  capable. 

Perhaps  some  things  in  regard  to  the  uses  of  wealth,  cap- 
ital and  money  can  be  more  easily  understood  by  stating  an 
imaginary  case  wherein  money  at  first  would  be  of  no  use. 

A   COLONY   WITHOUT   WEALTH. 

Suppose  a  village  of  a  thousand  persons,  with  a  variety 
of  trades  and  occupations,  should  have  all  its  inhabitants 
some  day  suddenly  snatched  from  home  and  placed  on  the 
back  of  a  comet, — no  one  having  a  single  thing  in  posses- 
sion but  the  clothes  he  had  on.  Suppose  they  were 
landed  the  next  day  on  a  planet  similar  in  all  respects  to 
our  world  except  that  it  was  uninhabited  by  mankind. 
Further,  suppose  they  arrived  in  the  southern  portion  of 
the  temperate  zone,  where  wild  fruit  could  be  obtained 
in  abundance  sufficient  to  sustain  life. 

*  This  is  the  reason  why  the  money  of  different  countries  varies  so 
enormously  in  volume.  A  rich  country  actually  needs  far  more  money 
per  capita  than  a  poor  country. 


jQ  SOCIAL  STRUGGLES. 

Those  persons  would  be  in  a  condition  similar  to  that  ot" 
primitive  man,  with,  however,  one  enormous  advantage : 
they  would  be  possessed  of  knowledge  which  it  has  taken 
our  race  thousands  of  years  to  acquire. 

What  would  this  colony  in  all  probability  do?  At  first, 
they  would  be  filled  with  consternation  and  despair,  but 
perennial  Hope  would  soon  partially  restore  their  spirits 
and  they  would  set  out  in  quest  of  drink  and  food.  No 
one  would  regret  the  lack  of  money,  simply  because  noth- 
ing would  be  lost  by  its  absence.  As  none  of  the  neces- 
saries of  life  could  be  bought  with  money,  it  would  be 
utterly  worthless. 

NEED    OF   TOOLS. 

A  remark  about  the  intrinsic,  unvarying  and  perpetual 
value  of  gold  and  silver  would  be  received  with  derision. 
Every  individual  would  be  intent  on  securing  the  primary 
needs  of  life,  viz.,  food,  drink,  clothing,  shelter,  warmth, 
and  protection  from  enemies. 

They  would  want  the  simplest  forms  of  wealth,  and 
would  go  to  work  to  get  them.  After  satisfying  thirst 
and  hunger,  their  next  desire  would  naturally  be  to  provide 
a  shelter  from  the  sun  and  storm— they  would  want  to 
build  houses.  They  would  not  think  how  much  money  a 
house  would  cost,  nor  desire  money  to  build  it  with.  The 
pressing  problem  would  be,  How  shall  we  construct  some 
kind  of  a  shelter  ? 

At  once,  the  imperative  need  of  tools  to  work  with 
would  possess  every  mind.  The  idea  in  the  sentence : 
"  Capital  is  a  tool  used  b\-  labor  in  creating  wealth,"  would 
recur  to  them  with  an  intensity  of  meaning  it  never  before 
possessed.  ,  Their  thoughts  would  turn  to  their  former 
possessions, — but  they  would  not  desire  many  things  for 
which  they  had  toiled  when  on  this  earth.  They  would 
want  working  capital  more  than  many  other  forms  of  wealth. 
A  sharp  steel  ax  would  seem  to  them  of  more  intrinsic 
value  than  a  wheelbarrow  full  of  gold  eagles.  They  would 
rather  have  a  sledge-hammer,  a  shovel,  a  pick  and  a  crow- 


WHA  T  CREA  TES  VAL  UE.  ^  I 

bar  than  all  the  paintings,  pianos  and  ornaments  they  had 
ever  seen.  The  distinction  between  capital,  by  the  use  of 
which  labor  can  readily  create  wealth,  and  those  forms  of 
wealth  which  cannot  be  so  used,  would  be  impressed  very 
sharply  upon  them. 

While  slowly  and  laboriously  cutting  a  stick  of  wood  in 
two  with  a  sharp  stone,  one  of  these  colonists  would  sigh 
when  he  thought  how  easily  and  rapidly  the  work  could  be 
done  with  a  buck-saw.  He  would  remember  that  when  on 
earth  four  buck-saws  could  be  had  for  one  day's  labor,  and 
would  naturally  think  how  delightful  it  would  be  to  get  one 
buck-saw  for  one  month's  labor. 

It  would  then  be  plain  to  him  that  the  amount  of  labor 
which  a  person  is  willing  to  give  for  a  certain  thing  does 
not  depend  on  the  thing  itself  but  on  the  person's  situation 
and  necessities,  and  that  he  will  willingly  give  more  or  less 
labor  for  it  as  circumstances  and  conditions  change.  This 
conclusion  would  lead  him  to  ask  whether  the  value  of 
things  not  bought  directly  wdth  labor  was  not  governed  by 
the  same  rule  as  when  paid  for  directly  by  labor. 

VALUE   OF   A   THING   IS   DEPENDENT   ON   CIRCUMSTANCES. 

He  would  observe  that  the  same  things  had  far  different 
values  in  his  estimation  then  from  what  they  had  when  in 
his  old  home.  As  these  different  ideas  of  value  were 
attached  to  precisely  the  same  things,  he  would  see  that 
the  values  were  not  inherent  and  intrinsic  in  the  things 
themselves.  If  they  were,  the  same  value  would  always  be 
attached  to  them  ;  because  an  intrinsic  quality  of  a  given 
thing  is  inseparable  from  that  thing  so  long  as  it  remains  in 
existence. 

The  colonist  would  next  say  to  himself :  "  Everything 
has  a  different  value  in  my  eyes  now  from  what  it  had 
when  in  my  former  circumstances.  Nothing  has  changed 
but  circumstances  and  conditions. 

"  Therefore  nothing  w^hatever  possesses  absolute,  intrinsic 
and  inherent  value  ;  the  worth  of  a  thing  depends  entirely 
upon  the  circumstances  with  which  the  thing  is  surrounded. 


32 


SOCIAL  STRUGGLES. 


■ — upon   the  relation   which   it    lias  to    the  condition   and 
necessities  of  mankind. 

"  As  the  value  of  a  thing  is  entirely  due  to  the  conditions 
by  which  it  is  environed,  it  necessarily  follows  that  every 
change  in  those  conditions  must  change  the  value  of  that 
thing  just  as  the  reflections  of  a  mirror  must  change  when 
diff"erent  objects  are  placed  before  it,"  These  propositions 
he  would  talk  about  with  his  fellow-colonists  and  would 
find  no  argument  necessary  for  their  acceptance,  as  every- 
one had  already  unconsciously  imbibed  them  from  the  hard 
facts  of  daily  experience. 

THE  VALUE  OF  LAND. 

Parties  would  take  short  journeys  in  different  directions 
to  explore  the  country.  They  would  discover  vast  natural 
meadows  of  fertile  soil,  and  magnificent  forests  of  good  tim- 
ber. They  would  think  how  valuable  this  soil  and  tim- 
ber would  be  if  situated  in  the  vicinity  of  their  former  home, 
and  of  how  little  worth  they  were  under  the  existing  cir- 
cumstances. The  value  which  their  life-long  education 
had  taught  them  was  one  of  the  most  real  and  solid  of 
all  kinds  of  values — viz.,  the  value  of  acres  of  fertile  land — 
they  would  see,  was  like  all  other  values, — the  result  of  the 
conditions  under  which  the  land  was  placed,  its  relation  to 
man  and  his  need  and  ability  to  derive  wealth  from  its  use. 
They  would  recognize  that  the  term  "valuable,"  when  ap- 
plied to  anything,  is  simply  a  brief  mode  of  stating  the  cir- 
cumstances and  conditions  under  which  that  thing  is  placed, 
and  the  relation  which  it  bears  to  mankind  in  consequence 
of  those  conditions.  Furthermore,  it  would  be  plain  that  a 
considerable  portion  of  those  conditions  are  creations  of 
custom  and-  law. 

NEED   OF   CAPITAL. 

We  have  seen  that  our  imaginary  colonists,  impelled  by 
instinctive  love  of  life  and  its  enjoyments,  have  gone  to 
work  to  create  wealth  and  capital,  with  nothing  to  aid  them 
but  their  knowledge  and  naked  hands.     Part  of  their  indus- 


NECESSITY  OE  ECONOMY. 


33 


try  would  necessaril}'  be  first  devoted  to  gathering  means 
of  subsistence  from  day  to  day.  This  labor  would  leave 
them  no  richer  at  one  week's  end  than  another.  They 
would  clearly  see  that  the  only  way  to  .escape  from  their 
destitute  condition  was  by  accumulating  capital.  The  im- 
perative need,  not  only  of  supplying  daily  arising  wants  but 
also  of  practicing  economy  of  time  and  food,  would  be 
sharply  forced  upon  their  attention.  Thus  the  first  lesson 
which  must  be  learned  by  every  one  who  wishes  to  acquire 
even  the  smallest  amount  of  wealth  or  capital  would  be 
taught  and  illustrated  hourly  by  the  constant  presence  of 
ugly  facts. 

More  fully  than  ever  before  they  would  realize  how  com- 
paratively inefficient  a  man's  work  is  when  he  is  without 
tools,  and  consequently  their  earliest  savings  of  time  and 
labor  would  be  expended  in  procuring  various  substances 
wherewith  to  make  rude  implements  of  different  kinds. 

HOW  COMMERCE  BEGAN. 

One  man  would  make  a  journey  to  a  rocky  hill,  and  after 
patient  search  among  the  fragments  of  rock  would  find  a 
sharp-edged  stone,  suitable  for  conversion  into  a  stone  ax. 
Straightway  he  would  think  that  perhaps  a  better  stone 
could  be  found,  and  would  continue  his  efforts  until  in  pos- 
session of  several  stones.  Doubtful  which  stone  was  the 
best  of  the  lot,  with  great  fatigue  he  would  carry  a  load  of 
them  into  camp.  From  an  excursion  along  the  sea-shore 
another  man  would  return  laden  with  shells  suitable  for  use 
as  drinking-cups.  Another  would  bring  in  a  bundle  of 
sticks  of  wood  which  could  be  used  as  ax-handles  or  as 
clubs  to  beat  off  wild  beasts. 

These  three  men  would  meet  and  exhibit  their  treasures 
to  one  another.  The  owner  of  the  sharp  stones  could  not 
use  all  of  them  himself,  and  would  at  once  wish  to  exchange 
one  stone  for  an  ax-handle,  and  another  stone  for  a  shell 
to  make  into  a  drinking-cup.  The  owner  of  the  shells 
would  have  more  of  them  than   needful,  and  would  prefer 


34 


SOCIAL  STRUGGLES. 


to  have  fewer  shells  and  to  own  instead  a  sharp  stone  and  a 
good  stick.  The  owner  of  the  sticks  with  Httle  reflection 
would  conclude  it  far  more  desirable  to  have  a  smaller  num- 
ber of  sticks,  and  in  place  of  those  parted  with,  have  a  shell 
for  a  cup  and  a  sharp  stone  to  fasten  on  the  end  of  one  of 
the  remaining  sticks. 

Thereupon  these  three  persons  would  exchange  goods 
with  one  another,  and  similar  exchanges  of  simple,  rude 
articles  would  take  place  between  a  considerable  number  of 
the  colonists.  Commerce  would  begin.  A  few  persons  are 
simply  a  fractional  part  of  the  world's  population.  When 
we  learn  how  two  or  three  men  will  naturally  trade  with 
each  other  when  placed  under  certain  circumstances  and 
actuated  by  certain  motives,  we  have  a  substantially  correct 
miniature  picture  of  what  two  or  three  hundred,  two  or 
three  thousand,  or  two  or  three  million  men  will  do  under 
similar  conditions.  Essentially  similar  motives  produce  es- 
sentially similar  conduct.  The  germs  of  the  vast  commerce 
which  encircles  the  globe  all  exist  in  the  aforesaid  simple 
exchanges. 

In  trade  of  all  kinds  the  first  event  in  the  progress  of  its 
birth  and  growth  occurs  when  A  learns  that  something  is 
in  the  possession  of  B,  the  ownership  of  which  the  fancies 
or  the  necessities  of  A  cause  him  to  think  will  give  greater 
satisfaction,  pleasure  or  power  than  a  certain  amount  of  his 
own  labor  or  some  commodity  which  he  already  possesses. 
A  conference  is  held  between  A  and  B.  The  relative  value 
of  things  is  agreed  on  and  an  exchange  is  made. 

When  the  world's  commerce  is  viewed  as  a  whole,  it  ap- 
pears such  a  tangled  net-work  of  trading,  buying  and  selling 
that  no  one  can  understand  it,  or  explain  the  motives  which 
cause  goods  to  be  incessantly  shipped  hither  and  thither. 
But  when  these  apparently  complex  commercial  transac- 
tions are  dissected,  they  resolve  themselves  into  the  simple 
combination  of  facts  which  caused  the  aforesaid  trades  be- 
tween the  colonists,  and  between  A  and  B. 

Each  one  of  the  three  colonists  aforesaid  gave  a  thing 
which  he  did  not  need  for  a  thing  which  he  did  need.     Or, 


UNFAIR  BARGAINS. 


35 


more  accurately  speaking,  he  gave  what  he  thought  he  needed 
least,  for  what  he  thought  he  needed  most. 

DEFINITION    OF    TRADE. 

Trade  has  been  defined  as  "  an  exchange  of  the  superfluous 
for  the  necessary."  This  is  a  correct  definition  in  many  in- 
stances. C  gives  D  something  which  is  superfluous  to  C,  but 
necessary  to  D.  D  gives  C  something  which  is  superfluous 
to  D,  but  necessary  to  C.  This  is  undoubtedly  the  natural 
manner  in  which  all  exchanges  of  commodities  and  labor 
would  be  made,  if  mankind  were  governed  by  the  Golden 
Rule.  No  one  would  then  be  obliged  to  labor  for  another 
person  unless  by  so  doing  he  received  as  much  benefit  as  he 
conferred.  The  workman  would  then  give  his  labor  and  re- 
ceive in  payment  therefor  what  he  needed,  but  which  was 
relatively  superfluous  to  his  employer.  When  a  man  traded 
he  would  always  dispose  thereby  of  something  of  little  or  no 
benefit  to  himself  until  exchanged  for  something  else  for 
which  its  previous  owner  had  less  need  than  for  what  he 
took  in  exchange  therefor. 

HOW  TRADE  IS  OFTEN  CARRIED  ON. 

But  in  fact  injustice  and  oppression  have  always  prevailed 
to  a  large  extent  throughout  the  world,  and  there  are  no  in- 
dications that  their  reign  will  terminate  this  year.  Ex- 
changes of  commodities,  and  of  labor  for  commodities  or 
money,  are  not  always  a  mutual  benefit.  One  of  the  parties 
to  the  transaction  often  gets  by  far  the  best  of  the  bargain. 
Vast  numbers  of  persons  have  been,  and  are  to-day,  com- 
pelled by  various  forms  of  commercial  dishonesty,  and  by  un- 
just legislation  backed  by  ruthless  power,  to  dispense  with 
or  forced  to  sell  many  things  which  are  not  strictly  superflu- 
ous, and  thereby  subject  themselves  and  families  to  priva- 
tion and  suffering.  Inequitable  taxation,  exorbitant  rent 
and  interest,  unfair  bargains,  inadequate  wages,  and  legis- 
lative robbery  in  different  forms,  compel  multitudes  to  go 
without  some  Jiecessaries  for  the  purpose  of  getting  or  re- 
tainincr  other  thing-s  still  more  needful  for  their  comfort  and 


36 


SOCIAL  STRUGGLES. 


happiness,  and  perhaps  vitally  essential  to  a  bare  subsistence. 
Therefore,  trade  as  it  is  actually  carried  on  should,  in  a  large 
percentage  of  cases,  be  defined  as  an  exchange  of  things 
which  appear  to  one  of  the  parties  to  the  bargain  of  less  ne- 
cessity, for  things  which  appear  o{  greater  necessity. 

Instead  of  always  selling  or  exchanging  superfluous  things, 
mankind  frequently  dispose  of  what  they  want  to  keep  for 
the  purpose  of  obtaining  something  for  which  their  wants 
are  still  greater.  It  would  therefore  be  better  to  define  trade 
as  an  exchange  of  what  can  be  most  easily  parted  with  for 
something  more  needed. 

WHAT  SIMPLE  BARTER  IS. 

The  aforesaid  exchanges  of  the  colonists  are  examples  of 
trade  by  complete  and  direct  barter.  Neither  money  nor 
credit  has  been  used,  and  no  merchant,  banker,  broker,  com- 
mission merchant,  shipper  or  middleman  of  any  kind  has 
acted  for  or  between  the  different  parties.  The  transaction 
has  been  effected  with  the  smallest  possible  amount  of  ex- 
pense, viz.,  the  time  of  the  parties  themselves  while  making 
the  trade.  No  one  has  traded  with  the  idea  of  getting  a 
thing  for  a  low  price  and  keeping  it  until  a  future  time  when 
more  could  be  had  for  it.  In  each  case  the  producer  has 
.given  the  fruit  of  his  labor  directly  to  the  consumer,  and  has 
received  in  return  the  product  of  another  man's  work  which 
is  wanted  for  personal  use.  The  advantages  of  the  trade 
are  confined  to  the  persons  who  are  principals  of  the  ex- 
change. No  fee,  commission,  or  profit  has  been  paid  to,  or 
made,  by  any  third  party  to  the  transaction. 

ADVANTAGES   OF   DIRECT   BARTER. 

Thousaads  of  years  have  passed  since  our  ancestors  first 
made  exchanges  similar  to  those  aforesaid.  Meanwhile 
human  ingenuity  has  been  taxed  for  the  purpose  of  invent- 
ing other  ways  of  trading  than  by  direct  barter.  These  en- 
deavors have  been  produced  by  the  difficulty  which  often 
occurs,  of  the  parties  directly  meeting  each  other  and  bring- 
ing- their  g-oods  with  them.     The  result  of  these  efforts  to 


BENEFITS  OF  DIRECT  TRADE.  37 

overcome  inconveniences  has  been  the  construction  of  ad- 
mirable commercial  machinery  whereby  a  man  who  wishes 
to  exchange  his  labor,  or  the  product  of  his  labor,  with 
another  man  for  the  product  of  that  man's  labor,  can  indi- 
rectly do  so  without  ever  meeting  the  man  with  whom  he 
really  trades. 

The  shortest  distance  between  two  points  is  a  straight 
line  drawn  from  one  point  to  the  other.  When  a  meeting 
is  practicable  between  two  men  who  each  possess  some- 
thing which  the  other  wants,  it  is  obvious  that  the  shortest 
road  to  an  exchange  is  direct  barter;  no  third  article  or 
third  man  intervenes  to  make  the  route  a  circuitous  one — • 
the  line  is  drawn  straight  and  direct.  It  follows  that 
wherever  and  whenever  it  is  practicable  for  the  parties  to 
meet  and  mutually  supply  each  other's  wants,  no  means  of 
making  exchanges  has  ever  been  invented  which  is  as  good 
as  the  primitive  method  of  complete  and  direct  barter. 
This  is  one  of  the  comparatively  few  cases  in  which  per- 
fection in  the  manner  of  doing  an  act  appears  to  have  been 
reached  the  first  time  the  act  was  done. 

When  one  thing  is  given  directly  for  another  thing,  there 
is  less  opportunity  for  errors  in  judgment  and  mistakes  in 
estimating  relative  value  than  occurs  when  one  thing  is 
given  for  a  third  article,  and  then  the  third  article  is  given 
for  the  desired  object.  Only  two  things  are  compared  with 
one  another;  the  parties  are  not  called  upon  to  appraise  a 
third  article.  After  the  relative  value  of  the  two  things  is 
decided  on,  only  one  exchange  is  made,  and  this  is  always 
simpler  and  plainer  than  when  two  or  three  exchanges  are 
made. 

MECHANISM   OF   EXCHANGING   THINGS    BY   USE   OF   MONEY. 

In  illustration  of  this,  let  us  now  carefully  note  the  diiTer- 
ence  between  a  simple  barter,  and  an  exchange  in  which 
money  is  used. 

R  has  more  apples  than  he  wants,  and  would  like  to  ex- 
change one  barrel  of  apples  for  a  barrel  of  potatoes.  S  has 
more  potatoes  than  he  wants,  and  would   like  to  exchange 


38 


SOCIAL  STRUGGLES. 


one  barrel  of  potatoes  for  a  barrel  of  apples.  The  simplest 
way  for  R  and  S  to  have  their  wants  supplied  is  for  R  to 
cart  his  apples  directly  to  the  house  of  S,  to  exchange  with 
S  for  a  barrel  of  potatoes,  and  then  put  the  potatoes  di- 
rectly in  the  cart  and  take  them  home. 

Instead  of  trading  by  the  aforesaid  barter,  if  R  take  the 
apples  to  the  store  of  C,  a  fruit  dealer,  and  sell  them  for 
money,  the  relative  value  of  the  apples  and  a  certain  amount 
of  money  must  first  be  arrived  at.  In  other  words,  the 
price  of  the  apples  is  fixed  and  then  the  money  is  handed  to 
R.  One  exchange  and  an  appraisal  of  the  relative  value  of 
two  articles,  viz.,  the  apples  and  the  money,  has  then  been 
made,  but  R  has  not  yet  got  what  he  wants. 

R  takes  the  money  received  for  the  apples  to  the  store  of 
T,  a  dealer  in  vegetables,  and  examines  a  barrel  of  potatoes. 
Then  the  relative  value  of  the  money  is  compared  with  the 
value  of  a  barrel  of  potatoes,  and  after  this  appraisal  is 
made,  R  hands  the  valuation  to  T  and  takes  the  potatoes. 

Two  exchanges  and  two  sets  of  appraisals  have  now 
taken  place,  but  S  has  not  made  the  exchange  which  he  de- 
sired to  make.  In  order  to  do  so  he  carts  his  potatoes  to 
the  store  of  T,  and  T  and  himself  estimate  the  value  of  a 
barrel  of  potatoes  compared  with  a  certain  amount  of 
money;  that  is,  they  decide  what  the  price  of  the  potatoes 
shall  be,  and  this  is  the  same  thing  as  deciding  what  the 
price  of  the  money  is.  T  pays  the  amount  of  money  de- 
cided on  to  S  and  takes  the  potatoes. 

S  then  takes  the  money  received  for  the  potatoes  to  C 
and  looks  at  a  barrel  of  apples.  S  and  C  then  appraise 
the  value  of  the  apples  and  the  value  of  the  money ;  that 
is,  the  price  in  money  of  the  apples  is  decided  on.  S  then 
hands  the  determined  amount  of  money  to  C  and  takes  the 
barrel  of  apples  home  with  him. 

WHO   ARE    PRINCIPALS   IN   A   TRADE. 

After  all  these  exchanges  and  cartages  have  been  made, 
R  and  S  have  both  done  in  a  roundabout  way  what  they 
might  have  done  by  direct   barter.     In   this  transaction  R 


MIDDLEMEN  LEVY  TOLL.  OQ 

and  S  are  the  real  persons,  the  principals,  who  have  ex- 
changed goods  with  each  other.  C  and  T  are  merely  go- 
betweens.  They  are  middlemen,  helping  R  and  S  trade  for 
the  purpose  of  making  a  profit  out  of  both  of  them. 

If  R  and  S  had  bartered  with  each  other,  neither  one  of 
them  would  have  incurred  the  risk  of  being  a  loser  at  the 
hands  of  C  and  T,  by  reason  of  a  faulty  judgment  of  values 
by  R  or  S  ;  or  by  the  possible  superior  shrewdness,  which 
may  border  on  dishonesty,  of  C  and  T.  In  a  direct  barter 
between  R  and  S,  a  certain  barrel  of  apples  and  a  certain 
barrel  of  potatoes,  both  of  a  particular  quality,  would  be  di- 
rectly before  each  man.  In  making  an  appraisal  of  values 
tliis  barrel  of  apples  would  be  compared  with  tJiat  barrel  of 
potatoes.  Each  man  would  know  at  once  how  he  was  going 
to  come  out — what  would  be  the  final  result  of  the  trade. 
But  when  the  appraisal  of  values  was  made  between  R  and 
C  and  T,  and  between  S  and  T  and  C,  the  value  of  apples 
and  potatoes  in  general  was  estimated,  instead  of  a  special 
valuation  of  a  particular  barrel  of  apples  or  potatoes.  At 
least  the  general  value  of  those  articles  had  more  influence 
on  the  minds  of  the  appraisers  than  it  would  if  the  object 
were  merely  to  compare  the  value  of  one  designated  barrel 
of  apples  with  that  of  one  designated  barrel  of  potatoes. 

Leaving  at  present  out  of  view  the  fact  that  C  and  T 
have  both  made  a  profit  out  of  R  and  S,  it  is  evident  that 
the  chances  of  an  equitable  bargain  were  diminished  by  the 
exchanges  which  were  made  to  reach  the  final  end  desired. 

In  the  foregoing  illustration  there  are  only  two  middle- 
men between  the  producer  and  consumer.  But  in  the  ordi- 
nar)'  course  of  commerce,  where  direct  barter  is  not  used,  a 
considerable  number  of  persons  often  intervene  between  the 
real  parties  to  the  exchange.  The  more  hands  two  things 
given  in  exchange  for  each  other  pass  through  before  each 
thing  reaches  its  final  destination,  the  greater  the  probabil- 
ity becomes  that  one  or  both  of  the  original  owners  of 
those  things  will  not  receive  a  fair  return  for  what  was 
parted  with. 

It  is  certain  that  the  producer  and  the  consumer  of  a  cer- 


40 


SOCIAL  STRUGGLES. 


tain  thing  must,  either  directly  or  indirectly,  pay  the  com- 
missions charged  by  the  third  parties  as  toll  for  having  that 
thing  pass  through  their  possession. 

SIMPLE   BARTER   IS    STILL   IN  USE, 

By  reason  of  the  foregoing  advantages  attending  it,  di- 
rect barter  to  a  considerable  extent  has  survived  the  inven- 
tion of  money,  and  the  many  devices  for  making  exchanges 
with  representatives  of  money.  This  is  so  not  only  in 
localities  where  money  is  scarce  and  exchanges  few  and 
simple  in  character,  but  direct  barter  is  still  carried  on  in 
the  great  centers  of  wealth  and  population.  In  London 
and  Paris  newspapers  are  now  printed  which  make  a  spe- 
cialty of  helping  persons  make  direct  trades  with  one  another. 
A  portion  of  their  advertising  space  is  devoted  to  notices 
similar  to  those  given  below  which  were  taken  from  a  re- 
cent London  paper. 

EXCHANGES. 

"  Well  mounted  slides  of  pigeon  dispatch,  used  during  the  siege 
of  Paris,  in  exchange  for  two  slides  of  interest,  also  well  mounted. 
— L.  Hawkins,  Hillside,  Hastings. 

"  Wanted,  standard  works  on  natural  history,  in  exchange  for  fossils 
and  algae.  A  good  copy  of  Goldsmith's  'Animated  Nature,'  colored 
plates,  2  vols.,  well  bound,  for  four  dozen  good  micro,  slides. — 165  Well 
street,  Birmingham. 

"A  valuable  collection  of  British  mosses  (120  specimens),  with  notes, 
from  herbarium  of  late  W.  Valentine,  offered  for  Cooke's  '  Hand-book 
of  Fungi.' — G.  E.  Massee,  8  West  Grove  Terrace,  Scarborough." 

It  appears  not  improbable  that  the  public  press  will  here- 
after be  used  far  more  than  it  has  been  for  bringing  to- 
gether persons  who  can  mutually  supply  each  other's 
wants  by  direct  barter.  We  could  thus  restore  the  op- 
portunities for  trading  face  to  face  which  were  enjoyed  by 
our  ancestors  when  hamlets,  farms  and  forests  existed  where 
larsfe  cities  now  stand. 


LESS  DAMGER  OF  BEING  MISLED.  ^^ 


HOW   BARTER   TENDS   TO    PRODUCE    FAIR   BARGAINS. 

Let  us  now  consider  a  specimen  case,  which  may  show 
the  tendency  of  direct  barter  to  prevent  those  who  wish  to 
make  an  exchange  from  being  confused  and  misled  by  side 
and  irrelevant  facts  and  issues  and  being  cheated  in  con- 
sequence. 

Suppose  M  wants  to  exchange  his  colt  for  a  fine  cow, 
and  N  wishes  to  exchange  his  cow  for  a  colt.  If  M  is 
pleased  with  N's  cow  and  N  likes  M's  colt,  nothing  can  be 
simpler  than  for  M  and  N  to  bring  their  animals  to  a  place 
of  meeting  and  there  compare  the  relative  merits  and  value 
of  the  cow  and  the  colt.  The  range  of  debate  is  thereby 
made  as  small  as  possible.  Whether  live  stock  at  that 
time  is  high  priced  or  low  priced, — whether  the  Winter  is 
likely  to  be  severe  or  the  Summer  very. dry, — whether  feed 
will  be  plenty  or  scarce  and  high,  and  a  number  of  other 
considerations,  are  all  shut  out  as  foreign  to  the  question  be- 
fore M  and  N,  viz..  What  is  the  relative  value  of  these  two 
animals  ? 

The  manner  in  which  barter  often  benefits  both  parties 
and  prevents  troublesome  disputes  may  perhaps  be  still 
further  shown  by  an  example  of  direct  barter  of  labor  for 
labor. 

F  and  H  are  farmers  and  each  one  has  three  stalwart  sons 
living  at  home  with  their  father.  Their  farms  lie  near  to- 
gether but  are  quite  different  in  quality.  F's  farm  has  a 
subsoil  of  sand  and  gravel,  but  the  farm  of  H  has  a  subsoil 
of  heavy  clay.  As  a  result  of  this  difference,  the  farm  of 
F  produces  early  crops  while  the  crops  on  H's  farm  are  of 
slower  growth  and  are  later  in  ripening.  When  F's  corn  is 
ready  to  hoe,  the  corn  of  H  is  just  coming  up. 

F  then  says  to  H  :  "I  have  a  large  field  of  corn  which 
needs  hoeing  at  once.  You  come  and  help  me  hoe  my  corn 
and  when  yours  is  ready  I  will  help  you  hoe  yours."  H 
agrees  to  this,  and  early  the  next  morning  a  little  army  of 
men  has  invaded  F's  cornfield, — F  and  H  and  their  six 
sons  are  at  work,  cheered  alike  by  one  another's  company 


42 


SOCIAL  STRUGGLES. 


and  by  the  rapidity  with  which  the  weeds  are  cut  down. 
"  Many  hands  make  light  work." 

In  a  few  days  F's  large  cornfield  is  free  from  weeds  and 
presents  a  beautiful  sight  to  a  farmer's  eye.  In  a  short 
time  the  corn  of  H  needs  hoeing,  and  then  F  and  his  sons 
join  H  in  hoeing  his  corn  until  H  has  received  as  many 
days'  labor  as  he  has  given  F. 

Neither  F  nor  H  has  used  either  money  or  commodities 
in  making  this  exchange.  Both  have  traded  a  day's  work 
when  they  could  most  easily  spare  it  for  a  day's  work  when 
they  needed  it  most.  The  value  of  each  day's  labor  has 
thus  been  increased.  The  wages  of  a  day's  labor  have  been 
a  day's  labor.  There  has  been  no  possible  chance  for  any 
disputes  about  the  number  of  hours  which  a  man  should 
work  in  a  day,  the  rate  of  wages,  nor  about  any  other  of 
the  disputed  questions  concerning  the  proper  relations  of 
capital  and  labor.  The  exchange  has  furnished  steady 
employment,  and  enabled  both  parties  to  accumulate  a 
certain  number  of  days'  work  to  be  used  when  wanted.  It 
has  also  promoted  good  feeling  and  pleasant  relations 
between  neighbors,  which  is  a  matter  of  considerable 
importance. 

BARTERING   LABOR. 

The  foregoing  example  of  directly  paying  for  labor  with 
similar  labor  literally  describes  the  custom  of  "  changing 
work  "  which  prevails  more  or  less  throughout  the  agricult- 
ural portions  of  the  country.  It  is  generally  practiced 
more  in  the  new,  than  in  the  old  settled  sections.  Fifty 
years  ago,  in  the  neighborhood  where  my  boyhood  was 
passed,  it  was  a  universal  custom,  which  existed  by  reason  of 
the  scarcity  of  money,  the  difficulty  of  obtaining  laborers  in 
sufficient  numbers  when  an  urgent  need  of  their  services  for 
a  short  time  arose,  and  the  feeling  of  equality  and  kindli- 
ness which  prevailed  between  the  farmers. 

I  remember  seeing  a  case  of  the  application  of  this  mode 
of  barter  which  illustrates  its  simplicity  and  efficiency.  In 
December,  C  agreed  to  deliver  sixty  cords  of  wood,  for  a 


A  SUCCESSFUL   WOOD  BEE. 


43 


certain  price  per  cord,  at  a  designated  place  before  the  first 
day  of  the  next  April.  It  was  important  to  the  buyer  that 
the  wood  should  be  delivered  at  the  specified  time.  A 
series  of  mishaps  occurred  to  C,  the  result  of  which  was  that 
about  the  middle  of  March  the  wood  had  been  chopped, 
drawn  from  the  woods  and  piled  along  the  highway,  but 
none  of  it  had  been  drawn  to  market.  Just  before  that 
time  snow  had  fallen.  The  sleighing  was  good,  but  liable 
any  day  to  be  spoiled  by  a  thaw.  If  this  happened  the 
roads  would  be  left  in  such  a  bad  condition  that  it  would  be 
impracticable  to  draw  the  wood  during  the  remainder  of  the 
month.  C  would  therefore  be  unable,  with  his  own  team, 
to  deliver  the  wood  as  agreed.  Even  if  the  buyer  should 
permit  him  to  deliver  it  in  April,  after  the  road  had  settled 
and  become  good,  he  would  then  be  unable  to  spend  the 
time  requisite  to  draw  the  wood,  because  the  Spring  plow- 
ing and  sowing  would  have  to  be  attended  to  at  once. 

C  could  not  hire  the  neighboring  farmers  with  money  for 
two  reasons,  each  one  of  which  alone  was  sufficient.  He 
had  no  money  which  could  be  spared  for  that  purpose.  If 
he  had  possessed  the  money  and  offered  to  hire  them  with 
it,  nearly  every  one  of  his  neighbors  who  owned  teams 
would  have  been  very  much  offended  and  refused  to  hire 
out  on  such  an  occasion,  as  something  utterly  beneath  their 
dignity. 

C  resorted  to  direct  barter  of  labor  for  labor.  He  sent  a 
boy  Vv'ith  a  horse  and  cutter  to  all  the  neighbors  for  some 
distance  around,  inviting  them  to  "  a  wood  bee,"  the  next 
afternoon.  Shortly  after  noon  the  next  day  double  teams 
attached  to  wood  sleighs  arrived  at  C's  house  from  all  di- 
rections. Some  of  the  neighbors  who  had  no  teams  came 
with  willing  hands  to  help  load  and  unload  the  sleighs. 

Sleigh  after  sleigh  was  driven  to  the  wood  pile,  quickly 
loaded  with  wood,  and  started  for  the  market-place  amid 
merry  talk  and  laughter.  At  the  place  of  delivery  a  similar 
scene  occurred,  as  one  sleigh  after  another  delivered  its 
cargo  and  started  back  for  another  load.  When  the  sun  set, 
the  entire  pile  of  wood  had  been  moved  about  a  mile  down 


44 


SOCIAL  STRUGGLES. 


a  series  of  steep  hills  and  neatly  piled  at  the  place  agreed 
on.  The  neighbors  then  went  home  to  fodder  their  cattle 
and  attend  to  other  nightly  chores,  all  pleased  with  the 
success  of  the  "  wood  bee."  It  so  happened  that  a  thaw 
spoiled  the  roads  the  next  day. 

This  was  a  case  of  direct  barter  of  labor  for  labor  without 
any  agreement  either  verbal  or  written  between  the  parties 
to  it.  There  was  simply  the  tacit  understanding  that  C 
should  conform  to  established  custom,  and  be  willing  at 
any  time  to  help  any  other  one  of  the  neighbors  in  a  similar 
manner  whenever  help  was  required. 

MAKING   "  BEES." 

It  was  customary  to  make  "  a  bee"  whenever  an  unusual 
number  of  hands  for  a  few  hours  were  required  for  some 
heavy  work,  as  raising  the  frame  of  a  building,  for  instance ; 
or,  whenever  a  farmer  had  a  very  heavy  piece  of  work  of 
any  kind  which  he  wished  speedily  done  and  hated  to  begin 
alone.  Man's  social  nature  made  it  seem  easier  to  work  in  a 
large  company  of  acquaintances  where  the  work  was  speed- 
ily dispatched,  as  if  it  were  merely  a  huge  joke,  than  to 
drudge  along  alone.  At  these  gatherings  all  the  interesting 
news  and  topics  of  the  region  were  talked  over,  and  some  of 
the  old  farmers  would  grow  eloquent  in  descanting  on  the 
merits  of  a  favorite  team  of  horses,  or  the  strength  and  en- 
durance of  a  lusty  son.  Labor  was  not  the  only  thing 
which  was  bartered  ;  jokes  and  stories  were  also  freely  ex- 
changed. The  capacity  of  telling  a  good  story  always  in- 
sured its  owner  an  invitation  to  all  the  bees  in  the  neigh- 
borhood. Not  to  invite  a  neighbor  to  a  bee  was  considered 
an  affront, — an  intimation  that  his  society  Avas  undesirable. 
Frequently  the  afternoon's  work  was  followed  by  a  bounti- 
ful supper,  and  a  merry-making  at  the  house  of  the  maker  of 
the  bee.  In  this  the  wives,  daughters,  sisters,  and  sweet- 
hearts of  the  workers  participated,  and  it  was  often  long 
after  midnight  before  the  bee  broke  tip.  Thus  besides  being  a 
mode  of  bartering  labor,  "  bees  "  were  to  the  farmers  what 


ARISTOCRATIC  FOOLISHNESS. 


45 


"  parties  "  of  different  kinds  are  to  the  unfortunates  who  live 
in  cities. 

GROWTH   OF   CLASSES. 

That  the  custom  of  "changing  work  "  and  of  making 
"bees"  has  fallen  considerably  into  disuse  during  the 
last  forty  years  is  to  be  lamented.  It  shows  that  the  social 
relations  between  men  of  small  means  and  those  in  more 
opulent  circumstances  are  not  as  cordial  and  friendly  as 
they  were  ; — that  the  people  are  separating  into  classes 
who  do  not  fully  fraternize  wqth  each  other,  and  that  the 
spirit  of  the  community,  in  consequence,  is  less  democratic 
than  it  was.  It  denotes  also  the  growth  of  a  desire  to  imi- 
tate men  who  are  so  mean  and  ignorant  as  to  use  wealth  and 
position  solely  for  the  gratification  of  vanity  and  other  self- 
ish purposes,  and  to  imagine  that  such  conduct  confers 
nobility. 

WHAT  A  SNOB  IS. 

Persons  guilty  of  snobbery,  /.  c\,  of  mean  imitation  of 
mean  conduct,  are  generally  so  more  because  of  their  lack 
of  information  and  good  sense  than  from  inherent  baseness 
of  heart.  They  have  aspirations  for  superior  things,  but  do 
not  know  enough  to  see  the  distinction  between  what  is 
essentially  admirable  and  what  is  superficial,  ignoble  and  de- 
grading. These  pretentious  persons  practically  ignore  some 
of  the  cardinal.  Christian  virtues.  Let  us  hope  that  this 
prevalent  ignorance  of  to-day  will  melt  away  before  the 
broader  knowledge  and  better  spirit  of  to-morrow. 

BARTER    OFTEN   THE   BEST   WAY   TO    TRADE. 

The  simplicity  of  direct  barter  and  its  tendency  to  pre- 
vent unequal  amounts  of  value  from  being  exchanged 
equally  for  one  another  are  not  its  only  mierits.  Whenever 
circumstances  make  it  practicable,  it  is  the  most  economical 
method  of  making  exchanges ;  but,  as  will  hereafter  be 
shown,  under  certain  conditions,  indirect  barter,  and  pur- 
chase and  sale  with  money,  are  cheaper  than  direct  barter. 


46 


SOCIAL  STRUGGLES. 


Every  intelligent  mechanic  knows  that  the  power  of  an 
engine,  or  machine  of  any  kind,  is  greatest  where  the  force 
is  created,  or  arises  ;  and  that  every  transmission  of  that 
power  through  belts,  cogs,  shafting,  cams,  or  pulleys  dimin- 
ishes it.  Part  of  the  power  is  lost  in  turning  the  machinery 
which  transfers  it  from  one  place  to  another,  or  from  one 
kind  of  motion  to  another.  No  matter  how  perfect  the 
mechanism,  nor  how  well  oiled  it  may  be,  more  or  less  waste 
of  power  by  friction  is  unavoidable.  The  more  complex 
the  machinery,  and  the  farther  apart  its  different  portions 
are,  the  greater  the  expense  must  necessarily  be  of  realiz- 
ing a  given  amount  of  net  power  from  the  engine.  There- 
fore all  the  various  appliances  for  distributing  the  power  of 
an  engine  are  necessary  evils  and  should  be  made  as  few 
and  simple  as  possible. 

What  cogs,  belting,  shafting  and  pulleys  are  to  engines, 
merchants,  brokers,  bankers  and  middlemen  of  all  kinds 
are  to  men  who  wish  to  exchange  things  with  one 
another.  Belting  and  shafting  transfer  power ;  middlemen 
transfer  property.  As  we  shall  see  hereafter,  middlemen 
are  often  a  necessary  means  whereby  exchanges  are  made, 
but  nevertheless  they  increase  the  friction  and  expense 
attendant  upon  transfers  of  property  from  one  man  to  an- 
other ;  that  is,  they  make  the  expense  greater  than  it  would 
be  if  it  were  practicable  to  use  direct  barter.  Other  things 
being  equal,  producers  receive  a  less  value  in  return  for 
what  they  create,  and  consumers  give  a  greater  value  for 
what  they  buy,  just  in  proportion  to  the  number  of  middle- 
men who  intervene  between  them.  This  is  unavoidably  so 
from  the  fact  that  the  necessary  expenses,  as  well  as  the 
profits  of  the  middlemen,  must  be  borne  by  those  who 
originally  sell  and  those  who  finally  buy. 

PROFITS    OF    MIDDLEMEN. 

Merchants  and  agents  of  different  kinds  do  not  always 
transact  business  for  strictly  benevolent  purposes. 

This  may  be  illustrated  by  reference  to  a  state  of  facts 
now  existing. 


A  COSTLY  TRADE  FOR  THE  PRINCIPALS. 


47 


A  shoemaker  living  in  Massachusetts  wishes  to  exchange 
a  pair  of  boots  for  some  corn  to  feed  his  fowls.  A  farmer 
living  in  Iowa  wishes  to  exchange  some  corn  for  a  pair  of 
boots.  These  two  men,  lacking  facilities  for  direct  barter, 
trade  with  each  other  through  the  intervention  of  a  num- 
ber of  middlemen.  The  shoemaker  takes  his  boots  to  a 
merchant  and  sells  them  for  two  dollars  and  forty  cents. 
He  then  takes  this  money  and. with  it  buys  four  bushels  of 
corn.  The  shoemaker  has  then  exchanged  one  pair  of  boots 
for  four  bushels  of  corn.  The  boots  are  then  sent  through 
different  persons  to  a  merchant  in  Iowa.  The  Iowa  farmer' 
sells  twenty  bushels  of  corn  for  four  dollars,  and  takes 
the  money  and  buys  the  identical  boots  which  the  Massa- 
chusetts shoemaker  sold.  The  farmer  has  then  exchanged 
twenty  bushels  of  corn  for  a  pair  of  boots. 

The  exchange  is  now  completed.  The  shoemaker  has 
got  four  bushels  of  corn  and  the  farmer  has  got  the  boots. 
Now  what  has  become  of  the  rest  of  the  corn — ^the  sixteen 
bushels  which  the  farmer  gave  more  than  the  shoemaker  re- 
ceived ?  The  answer  is  obvious  ;  the  middlemen  have  got  it. 
They  have  charged  the  farmer  and  the  shoemaker  sixteen 
bushels  of  corn  for  carrying  a  pair  of  boots  from  Massachu- 
setts to  Iowa  and  bringing  back  four  bushels  of  corn. 

In  the  foregoing  illustration,  for  the  purpose  of  making 
a  moderate  statement,  the  retail  price  of  corn  in  Massachu- 
setts is  placed  at  three  times  the  wholesale  price  of  corn  in 
Iowa.  It  would,  however,  be  much  nearer  the  average 
market  rates  to  state  the  Massachusetts  retail  price  at  four 
times  the  Iowa  wholesale  price.  This,  of  course,  would 
make  the  example  a  more  striking  one. 

The  aforesaid  recital  of  what,  in  substance,  is  constantly 
occurring  in  a  countless  number  of  cases,  shows  how  large  a 
tribute  persons  at  a  considerable  distance  from  each  other 
often  pay  to  middlemen.  The  actual  expense  of  carrying 
corn  from  Iowa  to  Massachusetts  is  considerable,  but  it 
seems  as  if  the  transfer  ought  to  be  made  in  some  way  so 
that  the  consumer  would  not  pay  three  or  four  times  as  much 
as  the  farmer  receives.      Let  us  now  look  at  a  case  in  which 


48  SOCIAL  STRUGGLES. 

the  distance  between  the  real  parties  to  the  exchange  is 
small. 

A  farmer  living  near  a  city  wishes  to  exchange  some 
butter  for  a  coat.  At  the  same  time  a  tailor  living  in  the 
city  wishes  to  exchange  a  coat  for  a  tub  of  butter.  The 
farmer  drives  into  the  city  with  some  tubs  of  butter,  and 
sells  them  to  a  wholesale  dealer  in  butter  for  twenty-five 
cents  a  pound.  He  takes  the  money  to  a  dealer  in  clothing 
and  buys  a  coat  for  which  he  pays  twelve  dollars.  He  has 
then  exchanged  forty-eight  pounds  of  butter  for  a  coat. 
This  coat  was  made  by  the  said  tailor  who  sold  it  for  ten 
dollars,  and  a  couple  of  days  afterward  he  took  this  money 
to  a  retail  butter  dealer  and  bought  a  tub  containing  thirty- 
three  pounds  of  the  same  butter  which  the  farmer  sold. 
The  tailor  had  then  exchanged  his  coat  for  fifteen  pounds 
less  butter  than  the  farmer  gave  for  the  same  coat. 

If  the  farmer  and  the  tailor  could  have  made  a  direct 
barter  with  each  other,  they  would,  between  them,  have 
saved  the  butter  which  the  middemen  have  taken  as  toll 
for  having  the  goods  pass  through  their  hands.  In  a  di- 
rect trade,  the  tailor  would  probably  have  got  about  forty 
pounds  of  butter  for  his  coat. 

When  a  boy;  I  knew  a  man  who  owned  a  large  farm  and 
had  a  fixed  policy  of  disposing  of  as  much  of  his  products 
as  possible  by  direct  barter.  He  was  constantly  making 
direct  exchanges  with  the  blacksmith,  the  grocer,  the 
tailor,  the  doctor,  and  with  every  one  else  with  whom  a 
direct  barter  could  be  made.  The  neighbors  laughed  at 
this  and  called  it  what  mankind  are  prone  to  call  conduct 
which  they  do  not  understand,  "eccentric."  He  was  fre- 
quently asked  :  "  Why  do  you  barter  like  a  savage  when 
you  can  so  easily  sell  your  crops  for  money  ?  " 

But  the  farmer  kept  still  and  steadily  persevered  in  his 
"  eccentricity."  The  result  was  that  this  settled  habit  of 
paying  his  bills  largely  by  direct  barter,  in  course  of  time 
made  him  the  most  prosperous  farmer  in  the  vicinity. 

None  of  his  acquaintances  saw  the  fact  that  by  direct 
barter  he  continually  sold  his  products  for  a  higher  price 


TRUE  WAY  TO  MEASURE  WAGES.  .g 

than  the  neighbors  did.  He  made  the  exchanges  which  he 
desired  to  make  with  a  smaller  amount  of  products  than  he 
would  have  been  obliged  to  give  if  middlemen  had  stood 
between  him  and  those  he  dealt  with.  He  had  no  diffi- 
culty in  bartering  again  with  a  man  who  had  made  one 
trade  of  that  kind,  because  his  customers  always  fared  as 
well  and  often  better  than  they  would  if  their  exchanges 
had  been  made  in  the  ordinary  way  with  money.  It  would 
be  better  for  the  whole  community  to  have  more  such 
eccentric  farmers. 

BARTER   COULD    BE   EMPLOYED    MORE   THAN   IT   IS. 

Direct  barter  of  one  kind  of  labor  for  another  kind  of 
labor  and  direct  barter  of  labor  for  commodities,  especially 
in  periods  of  business  depression,  could  be  profitably  re- 
sorted to  far  more  than  they  are.  It  is  an  error,  both  prev- 
alent and  pernicious,  for  workmen  to  suppose  that  their 
wages  are  necessarily  very  low  when  they  do  not  receive 
pay  in  money.  Idle  men  not  infrequently  say :  "  There 
is  plenty  of  work  if  you  work  for  nothing  but  trade.  We 
do  not  want  to  work  for  nothing-." 

BEST   TEST   OF   WAGES. 

The  fact  is  that  a  man  may  receive  fair,  or  even  high 
wages,  without  receiving  any  money  whatever.  The  true 
test  of  the  fairness  of  a  man's  wages  is  the  amount  of  the 
necessaries  of  life  which  he  gets  for  a  day's  labor.  It  is 
immaterial  to  the  laborer  whether  he  gets  the  things  he 
needs  directly  for  his  wages,  or  whether  he  gets  money 
and  then  takes  the  money  and  buys  the  goods.  The  es- 
sential thing  is  that  the  fair  value  of  the  labor  should  be 
balanced  by  necessaries.  Whether  this  takes  place  or  not 
does  not  depend  on  the  mode  of  payment,  but  on  the 
amount  of  value  which  is  transferred  to  the  workman  when 
his  wages  are  paid.  Very  frequently,  in  hard  times,  thousands 
of  idle  men  throughout  the  country  could  be  put  to  work 
at  once  if  they  would  take  their  wages  directly  in  the  prod- 
ucts of  the  mine,  the  farm,  the  mill,  and  the  factory. 
4 


CO  SOCIAL  STRUGGLES. 

This  course  would  have  a  powerful  influence  in  hastening 
the  return  of  better  times. 

Suppose  a  carriage  factory  in  Connecticut,  in  consequence 
of  inability  to  sell  carriages,  has  discharged  its  workmen. 
At  the  same  time  a  rice  planter  in  South  Carolina  writes : 
"  I  wish  to  buy  a  carriage  of  you,  but  cannot  sell  my  rice 
at  a  fair  price."  Why  could  not  the  planter  barter  his  rice 
for  a  carriage,  and  the  carriage-maker  pay  his  workmen 
in  rice  ?  Occasionally,  woolen  factories  in  New  England 
are  closed  for  want  of  sale  for  their  cloth,  and  the  workmen 
meanwhile  are  idle,  and  anxious  to  know  how  their  bread 
will  be  obtained  if  work  cannot  soon  be  had.  At  the  same 
time  in  many  sections  of  the  West,  farmers  who  own  over> 
flowing  granaries  of  wheat  are  sorely  in  need  of  woolens. 

Why  could  not  a  club  of  farmers  send  one  or  more  car 
loads  of  wheat,  direct  from  the  nearest  railroad  station  to 
the  factory,  and  receive  in  return  bales  of  woolen  cloth  to 
be  divided  equitably  among  the  contributors  of  the  wheat? 
The  manager  of  the  factory  could  have  the  wheat  ground 
into  flour,  and  paid  as  wages  to  the  factory  operatives. 

Similar  things  have  been  done  for  centuries,  and  it  would 
be  far  better  to  do  them  now  than  to  have  society  suffer 
such  great  losses  as  the  idleness  of  large  numbers  of  per- 
sons necessarily  entails.  Greater  information  about  political 
economy  would  often  enable  farmers,  employers  and  work- 
men to  devise  and  successfully  carry  out  plans  for  bridging 
a  chasm  of  business  stagnation  by  direct  barter.  A  high 
sense  of  honor  among  all  classes  of  citizens  would  also  be  an 
important  factor  in  facilitating  barter  in  the  manner  afore- 
said. 

FACILITIES   FOR   BARTER   SHOULD    BE    INCREASED. 

Government  should  take  measures  to  facilitate  direct  bar- 
ter, because  thereby  individual,  and  consequently  national 
prosperity  would  be  fostered. 

The  obstacle  to  direct  barter  between  persons  living  re- 
mote from  each  other  is  chiefly  lack  of  information.  For 
example,  a  manufacturer  of  cotton  cloth  in  Massachusetts 


NEED  OF  GREATER  INDUSTRIAL  INFORMATION.         t^\ 

may  want  to  barter  cloth  directly  with  a  Mississippi  cotton 
planter.  The  first  question  is  :  To  whom  shall  I  address 
my  proposition  ?  Not  having  knowledge  of  a  single  plant- 
er's address,  the  manufacturer  abandons  the  project  as 
impracticable. 

Discussion  and  practical  experience  have  resulted  in  the 
general  conviction  that  it  is  sound  public  policy  for  a  gov- 
ernment to  take  charge  of  the  distribution  and  dissemination 
among  the  people  of  all  kinds  of  information.  To  this  end 
the  Post  Office  in  all  its  departments  is  established  and 
maintained.  For  the  same  purpose,  every  ten  years,  at 
great  expense,  a  census  is  taken  and  published.  At  public 
expense  we  print  the  speeches  of  Congressmen,  and  send 
them  with  various  governmental  reports  all  over  the 
country. 

In  some  countries  the  Government  controls  the  telegraph 
lines.  All  these  measures  have  essentially  one  purpose  ; 
/.  e.,  to  educate  the  people  and  make  it  easier  for  every  man 
to  communicate  his  thoughts  and  desires  to  persons  remote 
from  himself.  In  this  work.  Government  should  take  an- 
other step.  Every  State  should  have  a  Bureau  of  Industrial 
Information,  which,  on  application  by  letter,  would  furnish 
the  inquirer  with  the  address  of  all  persons  or  firms  engaged 
in  any  specified  business  or  industry  in  that  State,  together 
with  such  other  information  as  might  be  required  to  enable 
the  wants  of  the  different  parties  to  be  fully  known  to  each 
other.  One  man  would  then  be  able  to  directly  state  what 
he  wished  to  get  and  what  he  wished  to  sell,  or  trade,  in  or- 
der to  get  it.  The  creation  of  such  a  bureau  would  enable 
a  resident  of  Maine  to  exchange  his  goods  directly  with  a  cit- 
izen of  Texas  without  paying  large  commissions  of  different 
kinds  to  those  who  make  a  profit  by  the  temporary  posses- 
sion of  property.  It  would  simplify  our  commercial  machin- 
ery, by  removing  the  need  of  the  present  great  number  of 
men  who  stand  between  the  producer  and  consumer. 


^2  SOCIAL  STRUGGLES. 

IMPORTANCE   OF   CITIZENS   BEING   ACQUAINTED. 

Whatever  facilitates  commercial  intercourse  between  citi- 
zens of  different  States,  and  their  knowledge  of  each  other's 
condition,  tends  to  make  us  a  more  homogeneous  nation. 
Any  measure  which  makes  it  easier  for  a  man  to  learn  about 
the  peculiarities  of  soil,  climate,  industries,  and  ideas  of  a 
locality  to  which  he  may  have  some  thoughts  of  removing, 
promotes  social  relations  between  all  parts  of  the  country. 
Increased  knowledge  of  mutual  wants  opens  new  markets 
for  labor,  goods  and  skill.  It  stimulates  education  of  all 
kinds.  It  makes  every  citizen  feel  more  fraternal  toward 
all  others. 

Under  our  present  social  system  a  majority  of  the  large 
fortunes  which  individuals  are  constantly  acquiring  are  not 
obtained  by  those  engaged  in  the  creation  of  wealth.  As  a 
general  rule  money  is  more  easily  made  by  acting  as  a  mid- 
dleman than  in  any  other  capacity.  It  is  the  traders  of  vari- 
ous kinds,  and  not  the  producers,  who  get  the  cream  of  in- 
dustrial efforts.  The  traders  in  money  usually  get  the  larg, 
est  share  of  profits. 

WEALTH    OF    CITIES. 

Wealth  accumulates  in  large  cities  largely  because  the 
various  products  of  industry  pass  through  those  cities  on 
their  way  from  the  producers  to  the  consumers,  and  pay  toll 
during  their  passage.  Hence  the  w^ealthiest  cities  of  the 
world  are  those  through  which  the  greatest  amount  of  prop- 
erty continually  passes.  In  all  ages,  the  wealthiest  na- 
tions  have  been  those  who  acted  as  middlemen,  and  handled 
in  various  ways  the  property  created  by  other  nations.  Any 
measure  which  would  enable  persons  engaged  in  different 
industrial  pursuits  to  more  easily  supply  each  other's  wants 
by  trading  without  paying  tribute  to  middlemen,  would 
lighten  the  burdens  of  the  laboring  population.  The  cost 
of  exchanging  the  productions  of  different  portions  of  the 
country  is  lessened  by  a  reduction   of  the  numbers  of  those 


WHEN  MIDDLEMEN  ARE  USEFUL. 


53 


who  must  be  paid  for  the  labor  involved  in  making  such 
exchanges. 

FACTS  IN  REGARD  TO  MIDDLEMEN. 

Much  has  been  said  and  written  in  eulogy  of  the  great 
benefits  conferred  on  the  community  by  bankers,  merchants, 
and  other  middlemen.  But  an  analysis  of  the  matter 
shows  that  they  are  of  service  in  so  far  as  they  perform  the 
labor  of  making  exchanges  cheaper  than  the  producers 
could  do  it  by  directly  trading  with  each  other.  Beyond 
that  point  they  are  burdens  on  society,  parasites  living  and 
often  growing  rich  on  the  labor  of  producers.  Every  un- 
necessary middleman  is  so  much  labor  and  energy  wasted  ; 
the  middleman  himself  may  flourish,  but  society  is  poorer  to 
the  extent  of  the  labor  that  he  might  otherwise  perform 
in  a  more  useful  capacity.  Therefore  the  best  interests  of 
every  community,  State,  and  nation,  require  the  adoption  of 
measures,  the  tendency  of  which  will  be  to  transfer  these  su- 
perfluous agents  into  some  employment,  useful,  not  simply 
to  themselves,  but  also  to  the  whole  people. 

Other  conditions  being  equal,  the  actual  expense  to  a 
railroad,  a  merchant,  or  an  agent  of  any  kind,  of  transfer- 
ring a  hundred  thousand  things  from  one  person  to  another, 
is  not  twice  as  great  as  the  cost  of  transferring  fifty  thousand 
things.  The  net  profits  of  a  middleman  may  be  untouched, 
or  even  be  increased,  at  the  same  time  that  his  charges  for 
performing  a  certain  service  are  diminished,  provided  the 
gross  amount  of  his  business  be  sufificiently  increased.  Con- 
sequently, society  can  secure  the  lowest  possible  expense  of 
making  exchanges  by  limiting  railroads,  merchants  and 
agents  of  all  kinds,  to  the  number  absolutely  needed  to  per- 
form the  requisite  service, 

PARALLEL  RAILROADS. 

The  aforesaid  principles  have  recently  been  illustrated  in 
a  striking  manner  by  the  construction  of  parallel  railroads 
not  necessary  to  perform  the  carriage  required.  In  every 
case,  such  roads  have  not  ultimately  cheapened  the  cost  of 


54  SOCIAL  STRUGGLES. 

transportation,  but  have  been  a  loss  to  the  community. 
When  an  existing  railroad  charges  exorbitant  rates,  and  has 
full  capacity  to  perform  all  the  public  service  required  along 
its  line,  a  parallel  railroad  should  not  be  allowed  to  be  built. 
The  Legislature  should  at  once  take  the  existing  road  by  the 
throat,  and  say :  "  We  will  make  you  carry  passengers  and 
freight  at  equitable  rates,  and  you  shall  not  be  allowed  to 
say  what  is  equitable.  We  will  establish  a  fair  tribunal 
to  decide  that  question,  and  will  compel  you  to  abide  by  its 
decision.  You  shall  no  longer  be  the  sole  judge  of  your 
own  case.     The  public  have  rights  as  well  as  yourselves." 

INCREASE   OF   MIDDLEMEN. 

It  is  a  common  delusion  to  suppose  that  an  increase  in 
the  number  of  middlemen,  and  of  those  engaged  in  pursuits 
auxiliary  to  industrial  production,  necessarily  results  in  a 
competition  which  lessens  the  cost  to  the  community  of  a 
particular  service.  For  example,  let  us  suppose  a  city  which 
actually  needs  the  services  of  twenty  physicians  and  ten  law- 
yers. Within  its  bounds  twenty  additional  doctors  and  ten 
additional  lawyers  have  recently  settled.  Would  medical 
and  legal  fees  thereby  be  diminished  ?  On  the  contrary,  that 
city  would  thereafter  have  to  support  two  men  where  one 
was  supported  before.  Many  physicians  and  lawyers  are 
opposed  to  the  trades  unions  of  bricklayers  and  carpenters, 
but  they  are  continually  supporting  trades  unions  which 
they  call  "Medical  Societies"  and  "Bar  Associations." 
These  trades  unions  fix  the  scale  of  prices  at  which  medi- 
cal and  legal  services  shall  be  rendered.  The  result  is,  that 
there  is  actually  little  competition  in  prices  of  wages.  The 
competition  is  for  employment.  Having  less  employment 
than  if  there  were  a  smaller  number  to  perform  the  service, 
there  is  a  greater  necessity  and  temptation  to  charge  the 
highest  possible  fees. 

What  has  been  said  of  physicians  and  lawyers  applies  to 
many  other  classes  of  persons.  When  society  is  properly 
organized,  measures  will  be  adopted,  the  tendency  of  which 
will  be  to  prevent  an  unnecessary  number  of  middlemen. 
Hereafter  this  subject  will  be  further  discussed. 


CHAPTER  IV. 

Indirect  Barter. — Trade  is  Seldom  made  Purely  for  Amusement. — Origin 
of  Commission  ^Merchants. — Origin  of  Merchants. — A  Merchant's 
Profits  are  for  Information. — Fairs. — When  Indirect  Barter  begins. — 
Foreign  Commerce  is  Barter. — rEffect  of  Destruction  of  Gold  and 
Silver. 

Transfers  of  property  are  not  made  for  the  mere  purpose 
of  transfer  ;  but  for  the  attainment  of  a  definite  purpose  pre- 
existing in  the  minds  of  all  parties  thereto. 

Perhaps  it  has  been  shown  with  sufficient  fuUness  that 
direct  barter  is  the  simplest  method  of  trading,  and  the  one 
wdiich  mankind  naturally  first  used.  Let  us  now  consider 
the  next  step  in  the  development  of  commerce,  and  to 
make  its  description  more  easily  understood,  return  to  the 
fortunes  of  our  imaginary  colonists.  When  we  left  them  they 
were  very  poor,  and  had  just  begun  to  create  wealth  and 
capital,  and  to  directly  exchange  things  with  one  another. 
But  they  are  steadily  working  and  practicing  economy,  and 
in  consequence,  wealth  and  capital  slowly  but  surely  in- 
crease. Neither  time  nor  labor  is  spent  on  wealth  which  is 
not  a  means  of  creating  other  wealth. 

Thus,  directed  by  imperative  necessity,  labor  as  far  as 
possible  is  employed  in  creating  the  means  whereby  wealth 
can  more  easily  be  produced.  After  a  time,  as  a  consequence 
of  such  a  course,  capital  in  the  form  of  rude  tools  begins  to 
be  abundant,  and  although  these  implements  are  of  an  in- 
ferior quality,  they  are  nevertheless  a  great  help  to  the 
naked  hands.  Labor  becomes  more  efficient  and  produc- 
tive. Food,  shelter  and  clothing  are  more  readily  obtained, 
and  life  becomes  easier  and  its  tenure  more  secure.  The 
colonists  increase  in  numbers.  They  are  now  provided 
with  weapons  to  defend  themselves  against  wild  beasts,  and 
there  is  no  longer  the  same  necessity  which  first  existed  for 

55 


56 


SOCIAL  STRUGGLES. 


all  congregating  within  narrow  limits  for  mutual  help  and 
protection.  The  country  is  explored  for  good  locations, 
and  emigrants  from  the  first  camping-ground  settle  the  best 
sites  on  the  neighboring  lands,  over  a  steadily  widening 
area. 

As  their  numbers  increase  and  the  distance  from  one 
man's  house  to  another's,  and  from  one  part  of  the  settle- 
ment to  another  growls  greater,  meeting  each  other  and 
trading  entirely  by  direct  barter  becomes  more  difficult. 
This  is  so  chiefly  because  a  personal  knowledge  of  each 
man's  wants,  and  his  capacity  to  supply  other  persons' 
wants,  becomes  less  universal.  Everybody  ceases  to  know 
everybody.  Consequently,  every  man  ceases  to  know  all 
those  who  want  to  trade,  what  things  they  wish  to  dispose 
of,  and  just  what  things  they  wish  to  get  in  exchange. 

ORIGIN    OF   COMMISSION    MERCHANTS. 

In  proportion  as  this  condition  of  things  grows,  the  need 
of  information  in  regard  to  each  other's  desires  and  abilities 
to  make  exchanges  also  grows.  The  colonists  need  an 
Industrial  Intelligence  Office  where  facts  in  regard  to  each 
other's  wants  can  readily  be  obtained.  The  events  which 
lead  to  the  opening  of  the  first  office  of  this  kind  are  always 
essentially  the  same  ;  i.  c,  circumstances  make  it  either 
convenient  or  necessary  for  a  third  party  to  intervene  be- 
tween the  two  persons  who  exchange  goods  with  each 
other. 

A  has  the  skin  of  a  wolf  which  he  wishes  to  exchange  for 
some  fish-hooks.  B  has  more  fish-hooks  than  he  wants, 
but  does  not  wish  to  trade  for  a  skin, — he  wants  to  ex- 
change them  for  an  ax.  C  has  a  surplus  stone  ax,  but  he 
does  not  want  any  fish-hooks, — he  wishes  to  exchange  the 
ax  for  a  wolf  skin. 

D  is  a  shoemaker  who  lives  in  a  cabin  near  the  junction 
of  several  much  traveled  paths.  While  D  is  sitting  in 
front  of  his  hut  at  work,  A  comes  along  with  his  wolf  skin, 
and  after  accosting  D,  says :  "  I  want  to  trade  this  skin  for 
its  value  in   fish-hooks,  but   do  not  know  who  has  any  to 


PROFIT  OF  COMMERCIAL  KNOWLEDGE. 


57 


spare.  You  live  here  where  you  see  a  great  many  more 
people  than  I  do,  and  can  therefore  more  easily  find  out 
who  wants  to  exchange  hooks  for  this  skin.  I  will  leave  the 
skin  here  ;  you  make  the  exchange,  and  I  will  pay  you  for 
the  trouble."  D  takes  the  skin  and  hangs  it  up  in  his 
cabin. 

Soon  afterward  B  comes  along  with  a  bunch  of  fish- 
hooks, and  after  making  remarks  similar  to  those  made  by 
A,  he  desires  D  to  help  him  make  a  trade  for  an  ax. 
Then  C  walks  up  to  D,  and  like  A  and  B,  he  requests  D's 
assistance  in  making  an  exchange  of  his  ax  for  a  wolf  skin. 
Thereupon  D  trades  A's  skin  for  C's  ax,  and  receives  a 
small  stone  hammer  from  C  for  his  trouble. 

When  next  D  sees  B,  he  gives  him  the  ax  received  from 
C,  takes  his  fish-hooks  in  exchange,  and  receives  one  fine 
hook  for  his  trouble. 

Finally,  A  returns,  and  upon  inquiring  about  the  fish- 
hooks is  told  that  they  have  been  obtained  in  exchange 
for  his  wolf  skin.  A  takes  the  hooks  and  gives  D  one  of 
them  for  his  trouble. 

The  desired  exchanges  have  now  all  been  made.  Indi- 
rect barter  has  begun.  D  has  made  a  profit  by  trading  the 
property  of  other  persons,  and  has  thus  become  a  middle- 
man. In  fact,  D  has  received  pay  for  keeping  an  intelli- 
gence office  ;  his  duties  were  to  get  the  precise  items  of  in- 
formation which  were  wanted  by  A,  B  and  C. 

D  now  perceives  that  a  profit  can  be  made  by  acquiring 
industrial  information,  and  having  a  central  location,  he 
puts  out  a  sign  :  "  I  help  people  trade  by  finding  out  who 
wants  to  procure  what  they  have  got,  and  who  can  furnish 
in  exchange  what  they  want."  This  sign  is  afterward  short- 
ened, without  changing  its  meaning,  so  that  it  reads : 
"General  Commission  Merchant." 

ORIGIN  OF  MERCHANTS. 

After  a  time  D  acquires  some  wealth,  and  knowing  what 
things  are  commonly  wanted  and  what  the  people  are 
willing  to  give  in  exchange  for  them,  he  puts   his  wealth   in 


58 


SOCIAL  STRUGGLES. 


the  form  of  a  supply  of  what  is  usually  needed.  When  a 
customer  appears  who  wishes  to  exchange  something  in  his 
possession  for  another  thing,  D  has  ordinarily  that  other 
thing  on  hand,  and  can  make  the  exchange  without  the  de- 
lay which  we  have  seen  occurred  in  making  trades  for  A,  B, 
and  C.  Besides  avoiding  the  delay,  there  is  another  ad- 
.  vantage  to  the  customers,  viz.,  they  can  see  the  things 
which  they  want,  examine  their  quality,  and  learn  at  once 
how  the  trade  is  coming  out. 

It  is  no  longer  a  question  oi  finding  s.  man  who  has  both 
the  desire  and  ability  to  exchange  certain  required  things, 
as  at  first.  D  has  both  this  knowledge  and  the  required 
goods  in  his  own  possession.  D  then  puts  out  a  different 
sign  :  "  I  help  people  trade  by  keeping  on  hand  the  things 
they  want  to  get,  by 'always  knowing  who  wants  what  they- 
wish  to  trade  off,  and  on  what  terms  such  an  exchange  can 
be  .made." 

Without  changing  its  meaning,  this  sign  is  finally  abbre- 
viated so  that  it  reads,  "  General  Merchant." 

D  now  keeps  in  his  cabin  substantially  the  same  medley  of 
things  which  most  of  us  have  seen  in  what  is  called  "  a  coun- 
try store.'*  Direct  barter  between  the  colonists  still  goes  on, 
but  for  several  reasons  a  considerable  number  of  persons  come 
to  trade  with  D.  They  do  not  know  who  else  can  supply 
their  wants,  and  at  the  same  time  be  willing  to  take  pay  in 
what  they  at  that  moment  wish  to  part  with.  Even  if  they 
did  know  who  was  both  willing  and  able  to  make  with  them 
the  exchange  desired,  it  might  cost  more  in  time,  labor  and 
other  expense  to  go  where  that  person  lives  than  it  would 
to  pay  D  his  profit. 

A  merchant's   profits  are  for  information. 

In  the  foregoing  sketch  the  causes,  motives  and  circum- 
stances which  have  made  D  at  first  a  commission  merchant, 
and  afterward  a  merchant,  are,  in  substance,  the  identical 
causes  and  conditions  which  first  started,  and  have  kept  in 
motion,  a  large  portion  of  the  world's  commerce.  When 
trade  is  analyzed  it  appears  that  salesrooms,  stores  and  shops 


FAIRS  CONVEY  COMMERCIAL  INFORMATION. 


59 


are  essentially  intelligence  offices.  The  most  sud'cessful 
keeper  of  one  of  these  offices  is  the  man  who  practically  has 
the  most  industrial  information  to  sell  the  public.  The  mer- 
chant should  know  what  articles  his  customers  want  and 
what  things  they  wish  to  give  in  exchange  for  them.  He 
should  also  know  who  are  able  and  willing  to  supply  the 
goods  desired  by  his  customers,  and  what  these  persons  are 
willing  to  take  in  exchange  for  what  they  furnish.  It  is  also 
important  that  the  relative  value  of  all  the  goods  he  deals  in, 
and  the  cost  of  their  transportation  and  other  expenses  of 
placing  them  in  the  hands  of  consumers,  should  be  known  to 
the  merchant. 

When  we  go  to  what  is  ordinarily  called  an  "  Intelligence 
Office,"  we  expect  to  receive  special  information  and  to  pay 
a  fee  therefor.  We  do  not  usually  recognize  the  fact  that 
the  charges  which  a  merchant  makes  for  his  goods,  over  and 
above  their  total  cost  to  him,  are,  in  fact,  fees  forgiving  prac- 
tical information  to  the  buyers  of  those  goods.  It  some- 
times happens  that  the  merchant  exchanges  his  goods  at  a 
loss  instead  of  a  profit  ;  he  is  then  suffering  from  his  own 
lack  of  knowledge  in  regard  to  present  or  prospective  values 
when  he  made  the  exchange  and  got  the  goods  which  must 
be  sold  at  a  loss. 

FAIRS. 

In  every  age,  all  peoples  and  nations  have  been  accustomed 
to  gathering  together  in  considerable  numbers, at  onetime 
and  place,  for  the  purpose  of  getting  the  information  which 
we  have  seen  is  so  necessary  to  those  who  wish  to  barter  one 
thing  for  another. 

L  may  have  something  which  he  wishes  to  dispose  of  in 
exchange  for  a  thing  which  M  owns.  M  may  wish  to  part 
with  that  thing  in  exchange  for  the  precise  article  which  L 
wishes  to  trade  off.  But  so  long  as  L  and  M  do  not  know 
these  facts,  nor  how  to  effect  a  meeting,  an  exchange  be- 
tween them  is  impossible.  Hence  commercial  and  indus- 
trial knowledge  is  the  necessary  forerunner- of  an  exchange. 


6o  SOCIAL  STRUGGLES. 

The  s2»Tie  principle  always  holds  good,  no  matter  whether 
it  be  between  two  individuals  or  between  two  nations. 

Until  the  invention  of  newspapers,  fairs  and  market-places 
were  the  principal  sources  of  acquiring  a  knowledge  of  each 
other's  wants.  The  great  fairs  of  Europe,  which  for  cent- 
uries were  such  important  events  to  nations,  were  chiefly 
gatherings  of  persons  who  wished  to  barter  directly  or  indi- 
rectly with  each  other.  Some  money  was  used  at  these  fairs, 
but  comparatively  little  ;  the  exchanges  were  chiefly  made 
in  substance,  like  those  aforesaid  between  A,  B  and  C.  To- 
day the  merchant  can  take  up  his  newspaper  and  study  the 
markets  in  all  quarters  of  the  globe.  But  market-places 
still  remain,  and,  although  far  less  important  than  formerly, 
fairs  of  various  kinds  for  the  purpose  of  disseminating  indus- 
trial and  commercial  information  are  still  frequently  held. 
A  World's  Fair  is  the  latest  mode  of  doing  substantially  just 
what  our  colonist  shoemaker  did  in  the  manner  aforesaid. 

WHEN    INDIRECT   BARTER   BEGINS. 

Whenever  A  and  B  wish  to  exchange  things  with  each 
other  and  for  any  reason  are  unable  to  do  so  without  the  in- 
tervention and  aid  of  a  third  person,  indirect  barter  begins. 
Shippers,  merchants,  salesmen  and  other  kinds  of  middle- 
men are  part  of  the  machinery  whereby  the  wants  of  A  and 
Bare  supplied.  The  merchants  of  this  country  do  not  have 
facilities  for  carrying  on  a  direct  trade  with  South  America, 
and  the  merchants  of  that  continent  have  no  means  of  di- 
rectly trading  with  us.  England  has  means  for  carrying  on 
a  direct  trade  with  South  America,  and  therefore  she  acts  to 
a  large  extent  the  part  of  a  middleman  between  parties  who 
would  be  benefited  by  directly  trading  with  each  other. 

We  have  now  seen  that  indirect  barter  differs  from  direct 
barter  only  by  the  fact  that  it  is  not  conducted  by  the  pro- 
ducers and  consumers,  but  by  third  parties  who  charge  a  fee 
or  profit  for  so  doing.  We  have  also  seen  that  this  mode  of 
trade  begins  at  an  early  stage  of  the  growth  of  society.  Like 
direct  barter,  it  is  not  peculiar  to  an  uncivilized  state  and  is 


FOREIGX  XATfONS  BARTER  GOODS.  ^i 

still  employed  to  a  great  extent  between  citizens  of  the  same 
country. 

It  maintains  its  hold  on  commerce  for  the  same  reason 
that  direct  barter  does.  Whenever  it  is  cheaper  or  more 
convenient  for  men  to  exchange  one  thing  for  another  with- 
out the  use  of  money  than  with  money,  barter  occurs.  The 
presence  of  a  third  party  does  not  affect  the  principle  which 
makes  barter  probable. 

FOREIGN   COMMERCE   IS   BARTER. 

An  illustration  of  indirect  barter  on  a  large  scale  is  con- 
stantly before  us  in  the  trade  of  this  country  with  foreign 
nations.  This  vast  commerce  is  carried  on  entirely  by  bar- 
ter. Money  is  not  used,  for  the  simple  reason  that  inter- 
national money  has  yet  to  be  made.  Gold  and  silver  are 
used  to  a  small  extent  to  settle  balances  of  accounts.  But 
those  metals  are  used  simply  as  commodities,  just  as  copper, 
tin  and  quicksilver  are.  A  pile  of  bricks  is  not  a  brick 
house,  and  the  material  from  which  money  is  made  is  not 
money.  We  have  several  times  suspended  specie  payments, 
but  this  event  did  not  interrupt  foreign  commerce  for  a 
single  day, — it  went  on,  as  before,  by  barter. 

The  international  commerce  of  the  world  is  carried  on  by 
an  indirect  barter  and  not  with  money.  Merchants  send 
ships  to  distant  ports  laden  with  various  kinds  of  valuable 
commodities.  The  ability  of  the  master  of  such  a  ship  to 
exchange  his  cargo  for  valuables  on  which  a  profit  can  be 
made  in  the  home  port,  does  not  depend  on  his  having  gold 
or  silver  to  buy  them  with.  No  matter  what  the  cargo  is, 
provided  the  foreigners  regard  its  possession  more  desirable 
than  goods  which  they  already  have,  an  exchange  is 
readily  effected.  A  ship  may  be  loaded  with  flour,  sugar, 
coffee,  or  hardware  ;  and  it  may  also  carry  some  gold  or 
silver.  But  when  those  metals  are  exchanged,  the  trans- 
action is  carried  on  just  as  if  a  keg  of  nails,  a  bale  of  cloth, 
or  any  other  valuable  thing  was  being  compared  with  the 
value  of  some  other  thing  and  an  exchange  is  made  on  the 
basis  of  the  appraisal  agreed  on. 


62  SOCIAL  STRUGGLES. 

EFFECT   OF   DESTRUCTION   OF   GOLD   AND    SILVER. 

The  reason  of  barter  between  nations,  and  the  use  of  gold 
and  silver  in  carrying  it  on,  may  be  illustrated  by  supposing 
the  immediate  loss  of  all  the  gold  and  silver  in  the  world. 
Would  trade  be  arrested  by  such  an  event  ?  Not  for  a  day. 
Different  nations  would  still  have  different  productions,  and 
therefore  an  exchange  of  different  goods  would  be  required 
to  supply  their  wants. 

For  example,  Cuba  would  continue  to  raise  sugar  and 
would  also  want  flour,  carriages,  hardware  and  other  things 
just  as  she  now  does.  Nations  who  do  not  raise  sugar,  and 
produce  the  things  which  Cuba  needs,  would  have  the  same 
desire  to  trade  with  her  they  now  have.  An  exchange  of 
commodities  would  therefore  be  made  just  as  at  present. 
The  only  difference  would  be  in  the  mode  of  making  change, 
or  settling  balances  when  things  of  unequal  value  were 
traded.  At  present,  gold  and  silver  are  used  to  a  small 
extent  for  that  purpose.  If  those  metals  did  not  exist,  some 
other  commodity  would  be  so  used,  and  greater  pains  prob- 
ably taken  to  trade  equal  amounts  of  value  so  as  to  avoid 
the  necessity  of  "  change."  The  use  of  those  metals  even 
as  commodities  is  therefore  not  a  necessity  of  commerce, 
but  often  a  convenience. 

In  the  foregoing  sketches  of  direct  and  indirect  barter, 
reference  to  the  use  of  money  has  been  avoided  as  far  as 
possible,  in  order  to  give  the  reader  a  clear  idea  of  the 
mechanism  of  exchanges  in  which  money  is  not  employed. 

We  have  seen  that  the  ultimate  object  of  human  industry 
and  effort  is  to  supply  wants  and  gratify  desires, — that  ex- 
changes are  made  directly  or  indirectly  for  those  purposes, 
and  that  the  methods  of  making  exchanges,  and  the  means 
employed  in  conducting  them,  are  all  subordinate  to  this 
desired  end.  Having  considered  exchanges  by  barter  with- 
out money,  let  us  now  dissect  exchanges  in  which  money  is 
used  and  find  out  why  we  use  it. 


« 
CHAPTER  V. 

Money. — Trade  through  a  Third  Person. — Trade  through  a  Third 
Thing. — Ancient  Kinds  of  Money. — The  peculiar  Use  of  Money. — 
Mechanism  of  Trading  through  the  Medium  of  a  Third  Thing. — 
What  Commerce  is  and  how  it  Developed. — Difference  between  Bar- 
ter and  Exchange  with  Money. — Definition  of  the  word  "  Money." 
— A  Common  but  False  Idea.— Some  Debts  can  only  be  Paid  with 
Coin. — The  same  Thing  may  have  several  Definitions. — Why  Barter 
is  often  Impracticable. — Origin  of  the  Use  of  Money. — Legal  Tender 
Laws. — Effect  of-  a  Change  in  Value  of  the  Legal  Tender. —  Legal 
Tender  Laws  Increase  Value. — Development  of  Money. — A  Poor 
,  Old  Thing  is  Preferred  to  a  Good  New  Thing. — What  we  can  Rea- 
sonably Expect. — Bankers  and  Money. — An  Irresistible  Movement. 

A  full  knozvledge  of  tJic  functions  of  money  is  possible  only 
to  those  who  clearly  understand  hozv  trade  is  conducted  ivitJi- 
out  its  use. 

We  have  found  that  direct  barter  was  the  first  mode  em- 
ployed by  mankind  to  trade  with  each  other.  It  has  further 
appeared  that  circumstances  often  render  it  inconvenient  or 
impracticable  for  mankind  to  trade  with  each  other  by  direct 
barter. 

We  have  also  found  that  the  second  natural  step  in  the 
progress  of  commerce  is  indirect  barter:  i.  e.,  to  make  ex- 
changes through  the  medium  of  a  third  person.  This  brings 
us  to  the  third  commercial  stage,  which  is  the  making  of 
exchanges  through  the  medium  of  a  third  thing. 

These  three  ways  of  trading  may  be  stated  thus : 

Simple  Barter :       Two  persons  trade  one  thing  for  another,  directly. 
^    y      ^  -n     f     .  S  Two  persons  trade  one  thing  for  another,  through 
■  )  the  medium  of  a  third  person. 
f  Two  persons  trade  one  thing  for  another,  through  the 
Money  or  pur-    J  medium  of  a  third  thing  ;  and,  generally  at  the  same 
chase  and  sale  :     j  time,  also  trade  through  the  medium  of  a  third  per- 
[  son  as  well  as  a  third  thing. 

63 


64 


SOCIAL  STRUGGLES. 


TRADE    THROUGH   A   THIRD    PERSON. 


To  make  the  difference  between  these  various  ways  of 
making  exchanges  as  simple  as  possible,  we  will  use  an  illus- 
tration. 

F  has  a  house  and  lot  which  he  wishes  to  exchange  for  a 
ten-acre  field  owned  by  G.  If  F  go  in  person  to  G  and 
exchanges  his  house  for  G's  field,  that  is  direct  barter. 

If  G  refuse  to  trade  directly  with  F,  and  then  F  employs 
a  real  estate  broker,  who,  by  various  arguments,  persuades 
G  to  exchange  his  field  for  F's  house,  that  is  indirect  bar- 
ter,— an  exchange  through  the  medium  of  a  third  person  : 
to  wit,  the  real  estate  broker. 

TRADE    THROUGH   A   THIRD   THING. 

Let  us  next  suppose  that  F  learns  that  G  will  not  ex- 
change his  field  for  anything  but  its  value  in  cows  and  oxen. 
Thereupon  F  exchanges  his  house  for  some  cows  and  oxen, 
drives  them  to  G's  house  and  exchanges  them  for  his  field. 
This  is  a  purchase  and  sale  by  the  use  of  money.  The 
cows  and  oxen  are  money,  the  third  thing  through  which 
the  trade  was  made. 

The  reader  will  observe  that  this  exchange  of  cattle  for 
G's  field  differs  in  one  important  respect  from  a  case  in 
which  a  neighboring  farmer  should  have  more  cattle  and 
less  land  than  he  wanted,  and  therefore  should  exchange 
some  cattle  for  a  field.  That  would  be  barter.  But  F 
exchanged  his  house  for  the  cattle  with  the  express  pur- 
pose of  temporarily  obtaining  a  medium  whereby  his  house 
could  be  changed  into  a  field.  G  accepted  the  medium, 
and  therefore  the  cattle  were  money.  In  effect,  F  melted 
his  house  down  and  ran  it  first  into  the  mold  of  oxen  and 
cows  ;  then  he  melted  the  cattle  and  ran  them  into  the 
mold  of  a  field. 

ANCIENT   KINDS   bY   MONEY. 

As  COWS,  oxen  and  other  domestic  animals  have  been  used 
as  money  for  thousands  of  years,  F  has  not  been  an  inno- 


TRADE  THROUGH  A   THIRD  THING.  65 

vator  in  doing  as  he  has.  The  wealth  of  a  person  was  for- 
merly computed  and  stated  in  this  kind  of  money.  The 
Bible  does  not  inform  us  how  many  thousand  pounds,  or 
dollars,  Job  was  worth,  but  it  says : 

"  His  substance  also  was  seven  thousand  sheep,  and  three  thousand 
camels,  and  five  hundred  yoke  of  oxen,  and  five  hundred  she-asses,  and 
a  very  great  household  ;  so  that  this  man  was  the  greatest  of  all  the  men 
of  the  East." 

In  England^  for  a  long  time,  cattle  were  the  medium  of 
exchange ;  and  the  laws  provided  severe  penalties  against 
those  who  mutilated  cattle, — not  simply  because  private 
property  was  thereby  injured,  but  because  of  the  additional 
crime  of  injuring  the  public  money.  These  enactments 
were  similar  to  those  now  on  our  statute  books  against 
clipping  coins.  It  is  only  about  two  hundred  years  since 
cattle  were  a  legal-tender  money  in  this  country. 

THE    PECULIAR   USE   OF   MONEY. 

Money  has  several  different  uses.  It  is  used  for  exchang- 
ing, comparing,  computing,  dividing,  storing,  and  transport- 
ing values.  But  the  peculiar  and  essential  function  and 
use  of  money  is  to  help  mankind  make  exchanges  and  com- 
pare the  value  of  one  thing  with  that  of  another.  How 
money  can  take  the  place  of  a  third  person  :  how  an  ex- 
change of  two  things  can  be  made  by  converting  one  or 
both  of  them  into  a  third  article,  and  then  exchanging  this 
third  article  for  the  desired  object ;  and  how  money  is  used 
as  a  help  and  guide  in  comparing  values,  must  be  clearly 
understood  before  any  definite  conception  of  the  various 
currency  problems  is  possible.  At  the  risk  of  being  tedi- 
ous, I  will  therefore  use  further  illustrations  as  an  aid  to 
the  reader  in  thinking  these  matters  slowly  over. 

MECHANISxM     OF    TRADING    THROUGH    THE    MEDIUM    OF   A 
THIRD     THING. 

A  farmer  wishing  to  get  a  pair  of  shoes,  goes  to  the  work- 
room  of  a  shoemaker,  and  seeing  a  pair  to  his   liking,  asks 
their  owner  if  he  does  not  wish  to  make  an   exchange  and 
5 


66  SOCIAL  STRUGGLES. 

take  some  farm  products  for  his  shoes.  A  conversation 
ensues,  in  which  it  transpires  that  the  shoemaker  wants 
three  sheep  skins  to  give  the  tanner  for  some  leather. 
Therefore  the  shoemaker  offers  to  trade  his  shoes  for  sheep- 
skins. The  farmer  has  no  sheep  skins.  He  then  goes 
home,  and  knowing  that  his  neighbor  S  has  sheep  skins  to 
spare,  he  goes  to  his  house  and  tells  him  that  a  certain  shoe- 
maker has  a  pair  of  shoes  which  can  only  be  got  by  a  man 
having  three  sheep  skins  to  give  in  exchange.  The  farmer 
then  inquires  if  S  will  not  take  the  skins  to  the  shoemaker 
and  get  the  shoes,  and  concludes  by  saying  that  after  that  is 
done  he  will  trade  with  S  for  the  shoes.  S  replies  to  the 
farmer  by  saying  that  as  the  shoemaker  wants  to  see  a 
third  thing,  instead  of  a  third  person,  it  is  unnecessary  for 
S  to  take  the  skins  to  the  shoemaker.  Whereupon  the 
farmer  barters  a  pig  for  the  sheep  skins,  takes  them  to  the 
shoemaker  and  trades  them  for  the  shoes.  After  getting 
the  skins,  the  shoemaker  exchanges  them  with  a  tanner  for 
some  leather. 

The  farmer  has  now  exchanged  a  pig  for  a  pair  of  shoes ; 
that  is,  the  shoes  are  the  final  result  of  his  trading  off  the 
pig.  The  skins  were  the  third  thing  which  served  as  a 
medium  of  exchange.  The  skins  were  money.  They  were 
the  temporary  form  into  which  the  farmer  changed  his  pig, 
and  the  shoemaker  changed  his  shoes.  When  this  form 
was  finally  changed,  the  farmer  had  his  shoes  and  the  shoe- 
maker had  his  leather. 

The  reader  will  observe  how  the  money  helped  the  differ- 
ent parties  to  this  trade  to  compare  values.  When  the  far- 
mer gave  his  pig  for  skins,  he  knew  that  they  would  buy  the 
shoes ;  therefore  the  exchange  was  merely  a  mode  of  com- 
paring the  pig  with  the  shoes.  It  was,  in  substance,  the 
same  as  if  the  pig  had  been  put  in  one  side  of  the  scales,  and 
the  skins,  labeled  :  "  These  are  equivalent  to  a  pair  of  shoes," 
put  in  the  other  side.  In  like  manner  the  shoemaker,  when 
he  gave  the  shoes  for  the  skins,  virtually  gave  the  shoes  for 
the  leather,  thus  comparing  the  shoes  with  the  leather  and 
adjudging  them  to  be  of  equal  value. 


DEVELOPMENT  OF  COMMERCE.  6y 

It  should  Steadily  be  remembered  that  all  comparisons  of 
value  are  an  exercise  of  the  judgment.  By  using  money,  in 
many  cases,  it  becomes  easier  to  compare  the  value  of  one 
thing  with  another,  because  we  thus  simplify  the  matter,  and 
steady  our  judgments  by  diminishing  the  number  of  things 
to  be  borne  in  mind  at  one  time.  Thus  in  the  last  foregoing 
case,  when  the  farmer  bartered  his  pig  for  the  skins,  they 
really  shortened  the  distance  between  the  pig  and  the  shoes, 
because  the  farmer  knew  that  the  effect  was  the  same  as 
if  he  were  comparing  his  pig  directly  with  the  shoes.  . 

Here,  too,  by  using  skins  as  money,  no  new  thing  has  been 
done,  as  the  skins  of  animals  from  time  immemorial  have 
been  used  as  money.  In  some  localities  skins  are  still  cur- 
rent money. 

The  reader  will  here  observe  that  we  are  not  now  consid- 
ering what  is  the  best  kind  of  money,  but  are  merely  speak- 
ing of  the  uses  of  money,  using  the  term  "  money  "  in  a 
general  sense.  No  one  can  intelligently  talk  about  the 
"best  kind"  of  plows  until  he  knows  just  what  a  plow  is, 
what  object  is  accomplished  by  it,  how  it  is  used  and  why 
it  is  used.  In  like  manner,  before  the  relative  merits  of  dif- 
ferent kinds  of  money  can  be  considered,  zvJiat  money  is 
used  for,  and  Jiozv  and  ivJiy  we  use  it  must  be  understood. 

WHAT   COMMERCE   IS   AND    HOW    IT   DEVELOPED. 

The  trade  of  the  world  appears  a  very  complex  matter. 
But  in  reality  it  is  all  nothing  but  a  multiplication  of  three 
things.  First,  a  trade  directly  between  A  and  B.  Second, 
a  trade  between  A  and  B  through  the  medium  of  a  third 
party,  C.  Third,  a  trade  between  A  and  B  through  the 
medium  of  a  third  thing,  called  money. 

The  art  of  commerce,  like  the  great  majority  of  other  arts, 
has  developed  very  slowly  through  a  long  period  of  time. 
Many  things  which  now  appear  very  simple  were  only 
learned  by  the  united  efforts  of  a  multitude  of  minds  acting 
for  century  after  century.  The  primitive  idea  of  using 
something  as  a  medium  of  trade,  appears  to  have  been  to 
compare  a   third   thing  with  one  of  two  objects  sought  to  be 


68  SOCIAL  STRUGGLES. 

exchanged,  and  if  this  third  thing  were  judged  to  be  of  the 
same  value  as  one  of  the  things  to  be  traded  for  something 
else,  then  to  use  this  third  thing  as  money,  with  little  refer- 
ence to  any  other  consideration  than  its  presumed  equality 
of  value  with  a  certain  other  thing.  The  fact  that  this 
money  was  bulky,  or  undesirable  in  other  respects,  was  sub- 
ordinated to  the  central  idea  of  obtaining  an  equality  of 
value.  After  a  long  time,  by  successive  and  painful  steps, 
mankind  discovered  that  it  was  both  desirable  and  practica- 
ble to  have  money  that  was  divisible,  compact,  portable  and 
imperishable.  This  led  to  the  use  of  iron,  copper,  tin, 
silver  and  gold  as  money.  Lastly,  it  has  been  learned  that 
representatives  of  value  can  be  used  in  making  exchanges 
just  as  effectively,  and  far  more  cheaply,  than  the  ancient 
kinds  of  money.  To  us  who  are  accustomed  to  using  rep- 
resentatives of  value,  and  to  seeing  large  amounts  of  proper- 
ty transferred  from  one  man  to  another  by  the  transfer  of  a 
few  small  pieces  of  paper  called  checks  or  drafts,  it  is  some- 
what difficult  to  think  of  the  payment  of  a  dozen  oxen,  or  a 
thousand  bushels  of  corn,  as  a  money  transaction.  We  are 
apt  to  think  of  it  as  barter. 

DIFFERENCE    BETWEEN    BARTER   AND   EXCHANGE   WITH 

MONEY. 

The  character  of  an  act  does  not  depend  on  the  kind  of 
instruments  used  in  performing  it.  Murder  may  be  com- 
mitted either  with  a  gun  or  a  bread-knife.  The  character  of 
an  act  depends  on  the  circumstances  under  which  it  is  com- 
mitted,— on  the  thoughts  which  directed  a  certain  course  of 
conduct. 

In  like  manner  the  principles  involved  in  a  trade  do  not 
depend  on  zvJiat  is  exchanged.  Whether  a  certain  transfer 
of  property  is  a  barter  or  a  money  transaction,  depends  on 
the  manner  in  which  the  thing  or  things  which  effect  it  is 
used.  Therefore  the  essence  of  a  bargain  in  which  a  sack  of 
salt,  a  dozen  beaver  skins,  a  wheelbarrow  full  of  copper  dol- 
lars, oi  a  yoke  of  oxen  is  used  as  an  aid  in  comparing  values, 
and  as  a  medium   of  exchange,  is  precisely  the  same  as  the 


I 


MUTUAL  CONSENT  MAKES  A   THING  MONEY. 


69 


essence  of  a  trade  in  which  gold  or  silver  coins,  or  legal-ten- 
der paper  notes  are  used  as  a  medium  of  exchange. 

For  example  :  a  roof  is  the  cover  to  a  building.  It  may 
be  nearly  flat  or  very  steep  ;  it  may  be  composed  of  wood, 
metal,  or  other  substances;  but  no  matter  what  its  form  or 
material,  if  it  perform  the  essential  function  of  covering  a 
building,  it  is  a  roof.  It  is  not  the  material  nor  shape,  but 
the  purpose  and  intent  which  it  carries  out  which  deter- 
mines its  definition.  A  thing  is  bartered  when  it  is  ex- 
changed without  being  used  as  a  third  thing. 

DEFINITION   OF   THE   WORD    "  MONEY." 

If  the  foregoing  have  been  carefully  read  and  thought 
over,  the  definition  of  the  word  "money  "  is  already  in  the 
reader's  mind. 

Whatever  two  persons  agree  shall  be  transferred  from 
one  to  the  other  as  a  medium  of  exchange,  and  as  an  aid  in 
comparing  and  computing  values,  is  money  in  the  full 
sense  of  the  term,  as  between  those  two  persons. 

Whatever  an  entire  community  agree  shall  be  transferred 
from  one  person  to  another  as  an  aid  in  comparing  and 
computing  values,  and  as  a  medium  of  exchange,  is  money 
in  the  full  sense  of  the  term,  in  that  community. 

Whatever  a  nation  consents  to  transfer  from  one  person 
to  another  as  an  aid  in  comparing  and  computing  values 
and  as  a  medium  of  exchange,  is  ^noney  in  the  full  sense  of 
the  term,  in  that  nation. 

The  aforesaid  definitions  explain  how  a  thing  can  be 
money  in  one  part  of  a  countr)%  and  not  be  money  in 
another  portion  of  the  same  country.  This  was  exempli- 
fied on  a  large  scale  in  the  United  States  during,  and  for 
several  years  after,  the  civil  war.  Greenbacks  were  then 
money  in  the  Northern  States,  but  in  California  they  were 
generally  merely  a  commodity,  simply  because  the  citizens 
of  that  State  did  not  agree  to  receive  and  use  them  as 
money.  During  the  war,  by  agreement  of  the  people.  Con- 
federate notes  were  money  in  the  territory  held  by  the 
Confederate  armies.     But  in  the   Northern   States  the  peo- 


jQ  SOCIAL  STRUGGLES. 

pie  did  not  agree  to  use    those    notes,  and  therefore   they 
were  not  money  in  the  North. 

The  distinctions  in  the  aforesaid  definitions  also  show 
why  things  which  pass  freely  as  money  in  one  nation,  cease 
to  be  money  as  soon  as  they  pass  the  frontiers.  Mankind 
have  not  yet  emerged  from  barbarism  and  ignorance  suffi- 
ciently to  render  possible  the  creation  of  money  which 
shall  pass  current  and  unchallenged  in  any  quarter  or  sec- 
tion of  the  globe.  But  it  seems  as  if  there  ought  to  be  in- 
telligence and  morality  enough  in  a  few  of  the  leading  na- 
tions to  enable  their  governments  to  create  an  interna- 
tional money,  as  between  the  citizens  of  those  nations. 

A   COMMON   BUT   FALSE   IDEA. 

Let  us  here  interrupt  our  discussion  of  the  uses  of  money 
long  enough  to  consider  a  statement  which  is  commonly 
supposed  to  be  highly  "  scientific."  This  idea  is  that, 
"  nothing  is  money  but  gold  and  silver  coins." 

As  Lincoln  used  to  say,  this  reminds  me  of  a  story.  A 
man  went  to  a  lawyer,  and  after  stating  his  case  inquired  : 
"  Can  a  man  sue  me  for  doing  thus  and  so  ?  "  The  reply 
was:  "  Certainly  not."  The  lawyer  was  then  asked:  "But 
if  he  should  sue  me,  could  he  recover  judgment?"  The 
answer  was  :  "  No,  he  could  not — he  would  have  no  right 
to  sue  you,  and  therefore  could  not  get  judgment."  The 
inquiry  was  then  made  :  "  But,  if  he  should  sue  me  and 
get  judgment,  could  execution  be  issued  and  the  judgment 
collected?"  To  this  the  answer  was :  "  Oh,  no  !  Such  a 
judgment  would  have  no  validity,  and  could  not  be  col- 
lected." Whereupon  the  client  burst  out:  "What  non- 
sense! You  tell  me  it  cannot  be  done,  but  I  tell  you  it  has 
been  done.  I  have  been  sued,  judgment  against  me  has 
been  given,  and,  worst  of  all,  the  sheriff  has  collected  it." 

In  like  manner,  a  plain  man  can  say  to  the  self-styled 
scientist  :  "  A  great  number  of  things  besides  gold  and  silver 
have  been  money  for  thousands  of  years,  and  enormous 
amounts  of  property  have  been  bought  and  sold  with  them 
to   the  satisfaction  of  all  parties.     Why,  then,  say   that   it 


COMMON  SENSE  IS  USEFUL.  yi 

is  impossible  to  do  what  we  all  know  has  been  done  so 
often  and  for  so  long  a  time  ?  " 

Much  mental  confusion  has  arisen  in  consequence  of  not 
distinguishing  the  difference  between  money  and  the  ma- 
terial from  which  it  is  manufactured,  and  of  which  it  con- 
sists. This  comes  from  the  prevalent  mistake  of  not  test- 
ing money  by  the  same  rules  we  apply  to  everything  else. 
All  other  things  we  name  by  what  they  actually  are  and 
not  by  what  they  happen  to  be  made  of. 

For  example :  we  usually  apply  the  term  "  house  "  to  a 
shelter  and  home  for  human  beings.  A  home  and  shelter 
for  human  beings  is  therefore  a  house,  no  matter  what  its 
size,  nor  of  what  material  it  is  composed.  It  may  be  made 
of  a  great  variety  of  materials,  but  it  has  the  same  name, 
and  in  essence  is  the  same  thing,  when  built  of  rough  logs 
as  when  made  of  the  finest  hewn  marble.  Houses  are  fre- 
quently built  of  wood,  but  a  pile  of  wood  is  not  therefore 
a  house.  In  these  respects,  what  is  true  of  houses  is  true 
of  money.  Money  is  frequently  made  of  gold  and  silver, 
but  a  lump  of  gold  or  silver  is  not  therefore  money.  Those 
who  say  that  nothing  is  money  unless  made  of  those  metals 
might,  with  the  same  propriety,  say  that  nothing  was  a 
house  unless  built  of  hewn  stone.  Money  can  be  made  of 
a  great  variety  of  materials,  just  as  houses  can.  The  test 
as  to  what  constitutes  a  house  is  the  object  and  purpose 
effected  by  a  building,  viz.,  furnishing  a  home  and  shelter 
for  human  beings.  The  test  as  to  what  constitutes  money 
is  the  special  object  and  purpose  which  a  certain  thing  gen- 
erally effects,  viz.,  the  transfer  of  property  and  the  payment 
of  debts  by  being  passed  from  hand  to  hand  without  in- 
dorsement or  other  formality  as  a  medium  of  exchange,  and 
a  help  in  comparing  the  value  of  one  thing  with  that  of 
another. 

If  paper  money  be  not  money,  then  the  United  States 
carried  on  a  vast  war  for  four  years,  and  transacted  an 
enormous  domestic  commerce  for  sixteen  years,  almost  en- 
tirely without  money.     England  also  carried   on   business 


72 


SOCIAL  STRUGGLES. 


from  1797  for  about  twenty  years  almost   entirely  without 
money. 

The  false  notion  that  nothing  but  gold  and  silver  coins 
are  money  naturally  leads  its  believers  into  the  error  of 
supposing  that  valuable  things  of  various  kinds  cannot 
really  be  bought,  sold  and  paid  for,  without  using  those 
coins.  Furthermore,  such  persons  tell  us  that  debts  can- 
not be  paid  without  gold  and  silver  coins.  But  the  simple 
fact  is  that  mankind  bought  and  sold  valuable  property  of 
various  kinds  for  centuries  before  coins  were  invented.  In 
recent  times,  countless  millions  of  debts  have  been  paid  to 
the  satisfaction  of  all  parties  without  using  gold  or  silver  in 
any  form.  Furthermore,  payment  of  debts  without  the 
use  of  any  money  is  constantly  taking  place.  The  large 
debts  continually  being  paid  by  the  merchants  and  bankers 
of  one  country  to  the  merchants  and  bankers  of  foreign 
countries  are  canceled  without  using  money  at  all.  Pay- 
ment is  made  with  various  commodities.  Of  these  com- 
modities the  raw  material  from  which  much  money  is  made 
— viz.,  gold  and  silver  bullion — forms  comparatively  a  very 
small  portion. 

SOME   DEBTS   CAN   ONLY   BE   PAID   WITH    COIN. 

The  error  of  supposing  that  debts  cannot  be  paid  unless 
gold  or  silver  coins  are  given  and  received,  has  probably 
arisen  from  not  noting  the  distinction  between  an  ordinary 
debt  and  a  specific  contract.  When  a  man  specifically 
agrees  to  deliver  as  payment  of  a  debt  a  thousand  bushels 
of  wheat,  a  thousand  silver  dollars,  or  any  other  definite 
and  specified  thing  or  things,  he  can  properly  discharge 
that  obligation  only  by  paying  the  exact  thing,  or  things, 
■  named  in  the  contract.  But  the  vast  majority  of  debts  are 
not  specific  contracts.  This  is  illustrated  by  the  different 
kinds  of  United  States  bonds.  The  major  part  of  those 
bonds  are  payable  "in  coin  of  the  standard  value  of  the 
United  States  on  the  14th  day  of  July,  1870."  This  is  a 
specific  contract,  because  certain  things  are  defined  which 
can,  and  must,  be  given  in  payment;   to  wit,  a  silver  dollar, 


HO  W  DEB  TS  ARE  PA  YABLE.  73 

nine-tenths  fine,  weighing  41 2>^  grains,  or  a  gold  dollar, 
nine-tenths  fine,  weighing  25  8-10  grains.  The  United 
States  have  the  right  to  choose  whether  they  will  pay  in  one 
or  the  other  of  the  said  coins.  But  beyond  the  choice  be- 
tween a  silver  or  a  gold  dollar,  they  have  rightfully  no 
choice.  Unless  the  creditor  agree  to  receive  it,  they  can- 
not pay  in  legal-tender  paper  of  any  kind  whatsoever  with- 
out breaking  their  contract.  Hence  all  bonds  issued  by 
virtue  of  said  act  should  be  paid  as  agreed, — in  coin  of  the 
standard  value  of  the  date  referred  to. 

But  a  portion  of  our  Government  bonds  are  payable  in 
*' lawful  money."  These  are  called  the  "  currency  bonds." 
Payment  of  these  can  be  made  in  whatever  is  legal-tender 
money  when  they  fall  due.  Therefore  the  currency  bonds 
are  not  specific  contracts,  because  there  is  no  definite  speci- 
fication beyond  the  requirement  that  the  money  paid  shall 
have  a  legal-tender  quality. 

All  obligations  in  which  the  agreement  is  that  a  certain 
number  of  dollars  shall  be  paid  at  a  given  time,  without 
any  specification  in  regard  to  what  those  dollars  shall  con- 
sist of,  are  payable  in  whatever  dollars  are  legal  tender 
when  the  debt  falls  due.  This  is  so,  simply  because  both 
parties  to  the  contract  have  therein  agreed  to  give  and 
receive  such  dollars  as  money  ;  and,  whatever  a  debtor  and 
creditor  agree  to  use  as  money,  is  thereby  converted  into 
money,  as  between  those  two  persons. 

THE   SAME   THING   MAY    HAVE    SEVERAL   DEFINITIONS. 

Many  definitions  depend,  not  on  the  qualities  of  the 
thing  itself,  but  on  the  manner  in  which  that  thing  is  used. 
Thus,  a  stick  three  feet  long,  and  an  inch  in  diameter,  is  a 
staff  if  used  as  a  support,  a  club  if  used  for  striking  a  blow, 
and  a  yard-stick  if  used  for  measuring  length.  No  matter 
what  definition  may  ordinarily  be  attached  to  a  thing, 
whenever  it  is  used  as  a  medium  of  exchange  and  as  a  help 
in  comparing  and  computing  values,  it  is  then  properly  de- 
fined as  MONEY. 

Hoping  that  the  definition  of  money  has  been  made  sufifi- 


74 


SOCIAL  STRUGGLES. 


ciently  explicit,  we   will  now  resume  consideration   of  its 
uses. 

WHY   BARTER   IS   OFTEN   IMPRACTICABLE. 

Theoretically,  there  are  no  obstacles  to  carrying  on  all 
trade  entirely  by  barter.  For  every  man  who  wants  to  give 
a  certain  thing  in  exchange,  there  is  always  a  person  who 
wants  to  receive  that  certain  thing  in  exchange.  Why  then 
not  promote  the  meeting  of  those  two  persons,  in  order 
that  they  may  barter  and  save  the  cost  of  money  ?  There 
are  several  answers  to  this  question.  One  of  them  is  the 
practical  difficulty  which  frequently  occurs  of  effecting  a 
meeting  between  two  persons  whose  commercial  desires  are 
exactly  opposite ;  viz.,  A  wants  precisely  the  thing  which 
B  wishes  to  dispose  of;  and  B  desires  just  what  A  wants 
to  give  in  exchange.  For  example  :  a  farmer  needs  a  tooth 
drawn,  and  wishes  to  give  in  exchange  for  the  desired  ser- 
vice a  bushel  of  turnips.  In  this  case  the  farmer's  desire  is 
to  receive  a  definite  service,  and  \.o  give  a  bushel  of  turnips. 
If  he  should  find  a  man  competent  and  willing  to  give  the 
required  service  and  receive  the  turnips  in  exchange,  then 
the  trade  could  be  completed  without  the  use  of  money. 
But  while  there  is  no  doubt  of  the  existence  of  a  person 
skilled  in  drawing  teeth  who  wishes  turnips  for  his  pay,  the 
farmer  might  have  to  suffer  toothache  for  some  time,  if  he 
waited  until  such  a  man  were  found. 

Money  is  used  because  a  man  who  will  work  for  money  is 
more  easily  found  than  one  who  vvill  take  pay  in  turnips. 

At  first  sight  a  combination  of  precisely  opposite  wants 
in  two  persons  appears  easy  to  find.  But  in  fact  it  is  often 
impracticable.  When  the  kinds  of  labor  and  the  number 
of  articles  of  commerce  were  very  few  and  simple,  it  was  an 
eas}^  matter  for  a  man  to  find  his  commercial  opposite. 
But  the  steady  growth  of  a  great  diversity  of  employments, 
and  the  creation  of  a  multitude  of  different  things,  have 
produced  such  numerous  and  complex  desires,  and  real  and 
fancied  wants,  that  it  is  yearly  becoming  more  and  more 
difficult    to    supply   those    desires    and   wants   by    barter. 


HOJV  MONEY  HELPS  EXCHANGES. 


75 


Money  is  therefore  used  as  a  means  whereby  one  man's  de- 
sire to  give  in  exchange  is  converted  into  an  ability  to 
give  in  exchange  just  what  the  man  wants  with  whom  a 
trade  is  desired.  How  money  is  employed  to  transform  a 
desire  to  /r^c/r  without  the  abiUty  into  a  combined  desire  to 
trade  and  an  ability  to  do  5^,  let  us  show  by  an  example. 

Suppose  the  last-mentioned  farmer  had  gone  to  several 
dentists  and  found  them  all  unwilling  to  take  turnips  in 
pay  for  drawing  his  tooth.  Finally,  he  goes  to  a  dentist 
who  also  refuses  to  work  for  turnips,  but  incidentally  says 
that  he  would  take  some  fresh  £ggs  in  payment  for  his  ser- 
vices. Whereupon  the  farmer  goes  to  a  market-place  and 
sells  his  turnips  for  some  fresh  eggs.  He  then  takes  the 
eggs  to  the  dentist  and  completes  the  bargain. 

In  this  case,  the  principle  involved  is  precisely  the  same 
as  if  the  farmer  had  exchanged  his  turnips  for  a  silver  coin 
instead  of  eggs.  The  eggs  were  money.  They  acted  as  a 
medium  of  exchange  by  making  a  coincidence  between  the 
thoughts  of  the  farmer  and  the  desires  of  the  dentist ,  that 
is,  the  eggs  made  the  farmer  and  the  dentist  think  alike. 
After  the  farmer  got  the  eggs  he  had  the  ability  to  give 
just  what  the  dentist  wished  to  receive. 

As  eggs  have  been  used  to  a  considerable  extent  as 
money,  nothing  new  is  presented  in  the  foregoing  example. 
The  reader  will  here  carefully  observe  that  the  obstacle  to 
a  trade  between  the  farmer  and  the  dentist  was  removed 
by  making  the  commercial  wants  of  one  man  precisely  the 
opposite  of  those  of  the  other.  Their  wants  then  resem- 
bled a  mortise  and  a  tenon, — one  fitted  the  other.  This 
was  effected  by  the  farmer  exchanging  turnips  for  eggs. 
Turnips  are  a  useful  commodity,  wanted  by  a  considerable 
number  of  persons,  but  they  are  not  nearly  as  generally  de- 
sired as  fresh  eggs  are.  The  completion  of  the  bargain  be- 
tween the  farmer  and  the  dentist  was  therefore  brought 
about  by  one  of  the  parties  to  the  transaction  first  changing 
his  ownership  of  a  thing  which  is  wanted  by  comparatively 
few  persons,  into  the  ownership  of  a  thing  more  generally 
wanted. 


76 


SOCIAL  STRUGGLES. 


ORIGIN   OF   THE    USE   OF    MONEY. 


As  we  have  reason  to  suppose  that  the  natural  laws  now 
in  force  have  always  operated  on  the  human  race,  the  fore- 
going train  of  events  shed  light  on  the  origin  and  continued 
use  of  money.  Sometime  in  the  misty  past,  our  ancestors 
discovered  that  some  articles  were  more  universally  wanted 
than  others.  They  next  observed  that  a  man  who  pos- 
sessed an  article  which  was  generally  wanted  could  more 
easily  make  exchanges  and  supply  his  wants  than  a  man 
who  owned  a  thing  which  was  not  generally  wanted.  It 
was  then  found  that  a  man  owning  a  thing  desired  by  a 
comparatively  small  number  of  persons,  by  directly  or  indi- 
rectly trading  with  one  of  that  small  number  of  persons 
could  exchange  that  thing  for  something  wanted  by  a  large 
number  of  persons.  It  was  next  noticed  that  the  attention 
of  mankind  was  gradually  becoming  directed  to  the  advan- 
tage of  owning  things  which  were  generally  wanted,  and 
that  this  fact  made  such  things  more  sought  after,  and  con- 
sequently more  valuable.  Finally,  long  continued  experi- 
ence taught  the  whole  community  that  certain  desirable 
things  could  always  safely  be  taken  in  exchange  for  what 
was  disposed  of,  simply  because  those  desirable  things 
could  readily  be  used  for  making  another  exchange. 

Those  desirable  things  were  thus  converted  into  money 
by  being  generally  used  as  a  medium  of  exchange.  Before 
the  discovery  that  ships  could  sail  from  Europe  to  the  In- 
dias  by  passing  around  the  Cape  of  Good  Hope,  pepper  was 
brought  from  India  to  Europe  over  land  on  beasts  of  bur- 
den. As  pepper  was  difficult  to  obtain,  and  much  used, 
it  was  considered  a  very  desirable  thing  to  own,  and  was 
therefore  generally  wanted.  It  had  the  advantage  of  be- 
ing portable,  comparatively  imperishable  and  easily  di- 
vided info  parcels  of  different  size  and  value.  Conse- 
quently, pepper  was  used  to  a  considerable  extent  as 
money  for  a  long  time. 

Mankind  undoubtedly  existed  a  long  time  before  the 
metals  were  used  for  any  purpose  whatever.     After  the  art 


I 


DEBTS  AND  LEGAL   TENDER. 


77 


of  working  metals  was  learned,  their  service  for  both  utility 
and  ornament  created  a  demand  for  them  until  finally  they 
became  generally  wanted.  After  the  fact  that  they  were 
generally  deemed  desirable  was  fully  established,  only  one 
more  step  was  needed  to  convert  them  into  money.  Iron, 
copper,  tin,  silver  and  gold  have  thus  all  passed  through  the 
various  stages  of  discovery  ;  a  test  of  value  for  ornament,  or 
use ;  a  growth  of  demand  until  generally  wanted  ;  and 
finally,  a  conversion  into  money. 

LEGAL-TENDER   LAWS. 

Whenever  a  thing,  by  habitual  use,  is  adopted  by  a  peo- 
ple as  money,  one  more  step  takes  place  as  that  people  ad- 
vances in  civilization.  That  is,  the  enactment  of  a  law 
making  the  use  of  a  thing  which  was  previously  voluntarily 
used  by  most  persons,  compulsory  to  all  in  some  cases. 
Such  is  a  legal-tender  law.  It  defines  what  shall  be  money 
and  compels  all  persons  who  owe  value  to  pay  it  in  a  certain 
thing,  which  the  creditor  is  also  compelled  to  receive. 

A  legal-tender  law  does  not  directly  compel  a  man  to  sell  his 
goods  for  what  is  declared  a  legal  tender.  It  merely  compels 
him,  after  having  so  sold  them,  to  receive  the  specified  legal 
tender  in  full  payment  of  his  claim.  But  this  fact  sometimes 
has  a  powerful  influence  in  determining  whether  an  owner  of 
certain  goods  will  sell  them  or  not.  If  he  decide  to  sell 
them,  the  practical  operation  of  the  legal-tender  law  is  to 
influence  the  price  which  will  be  asked  for  the  goods. 

Making  a  thing  a  legal  tender  changes  its  status  relative 
to  other  things  in  one  important  respect, — a  quality  is 
thereby  conferred  on  it  not  possessed  by  other  things;  viz., 
a  debt-paying  power  at  a  specified  price.  Any  valuable  thing 
can  be  used  in  payment  of  a  debt,  provided  the  creditor 
will  accept  it  at  a  satisfactory  price  to  the  debtor.  But  a 
legal  tender,  for  the  purpose  of  paying  debts,  has  a  fixed 
price  at  which  it  must  be  paid  by  the  debtor  and  received 
by  the  creditor.  Thus,  at  present  in  this  country  the  legal 
price  of  25  8-10  grs.  of  standard  gold  is  one  dollar,  and  the 
legal  price  of  4i2]4,  grs.  of  standard  silver  is  one  dollar.     In 


78 


SOCIAL  STRUGGLES. 


1870,  the  raw  materials  from  which  these  two  kinds  of 
dollars  are  made  were  about  equal  in  value.  The  gold 
dollar  has  a  far  greater  value  now  than  it  then  had  ;  but, 
for  debt-paying,  it  is  still  only  one  dollar.  The  silver  dollar 
has  not  advanced  in  value  as  much  as  the  gold  dollar ;  but 
it  too  has  a  greater  value  than  It  had  in  1870.  But  the 
fact  that  the  silver  dollar  is  worth  more  to-day  than  either 
the  silver  or  the  gold  dollar  was  in  1870  does  not  make  it 
any  more  efficient  in  paying  debts, — it  is  still  only  one 
dollar.  For  all  other  purposes  than  paying  old  debts  both 
the  gold  and  the  silver  dollar  are  far  more  valuable  now 
than  fifteen  years  ago. 

EFFECT   OF   A   CHANGE   IN   VALUE   OF   THE  LEGAL  TENDER. 

The  evidence  of  this  is  the  fact  that  more  property  of  all 
kinds  can  be  bought  with  them  now  than  then.  Conse- 
quently more  property  must  be  given  nozv  to  get  possession 
of  them,  and  therefore  their  rise  in  value  makes  it  harder 
for  the  debtor,  and  increases  the  wealth  of  the  creditor. 
When  paid,  the  creditor  gets  the  same  number  of  dollars 
originally  agreed  on,  but  each  one  of  them  is  worth  more 
than  formerly,  and  the  debtor  is  bound  by  the  legal-tender 
law  to  pay,  not  simply  the  amount  of  value  received  when 
the  debt  was  created,  but  the  NUMBER  of  dollars  called  for 
in  the  legal-tender  money. 

The  aforesaid  considerations  show  why  affixing  a  legal- 
tender  quality  to  a  thing  gives  it  one  positive  and  fixed  use 
and  value  not  before  possessed.  When  the  legal-tender 
quality  is  spread  over  a  great  number  and  amount  of  things 
— as  when  wheat,  corn  and  cattle  are  made  legal  tender — the 
value  of  each  one  of  those  things  is  not  appreciably  raised 
thereby.  But  when  the  debt-paying  power  is  limited  to 
articles  small  in  number  and  amount,  as  in  case  of  making 
gold  and  silver  sole  legal  tenders,  it  then  has  a  great  influ- 
ence in  raising  their  value.  The  value  of  those  metals  com- 
pared with  all  the  other  property  in  the  world  is  very 
small.  Furthermore,  their  total  value  is  very  small  com- 
pared with  the  total  amount  of   debt  existing  in  the  world. 


INCREASED  DEMAND  INCREASES  VALUE.  yg 

Making  a  law  which  compels  the  payment  of  all  debts  in 
gold  and  silver,  therefore,  enormously  increases  the  use,  the 
demand  for,  and  the  consequent  value  of,  those  metals. 

In  the  first  place,  a  great  demand  for  them  arises  for 
coinage  purposes.  Secondly,  the  use  of  a  metal  for  mak- 
ing legal-tender  money  affects  its  value  for  other  purposes 
besides  the  scarcity  occasioned  by  its  coinage.  An  un- 
coined metal,  which  when  coined  is  a  legal  tender,  has  at 
all  times  a  royal  prerogative  over  other  metals  and  other 
kinds  of  property.  It  is  the  debt-paying  metal,  the  repre- 
sentative of  wealth  and  the  symbol  of  pecuniary  resources. 
When  used  in  the  arts,  or  for  ornament,  it  is  not  simply  a 
valuable  metal — it  betokens  that  the  owner  is  rich  enough 
to  melt  a  part  of  his  money,  and  use  it  where  cheaper  mate- 
rial is  commonly  employed. 

Remove  the  legal-tender  quality  from  a  metal  to  which 
it  was  once  attached,  and  not  only  is  its  use  for  coinage  de- 
stroyed, but,  in  other  respects,  its  value  is  impaired.  Its 
prestige  is  gone ;  it  is  no  longer  a  royal  metal  with  powers 
beyond  others  ;  and  as  a  result  of  this,  when  used  in  the 
arts  it  does  not  supply  the  requirements  of  those  who  wish 
to  make  a  luxurious  display  of  their  wealth.  Silver  plate  is 
not  as  highly  esteemed  as  when  silver  was  a  full  legal 
tender.  Thus  we  see  that  the  value  of  gold  and  silver,  to  a 
considerable  extent,  is  created  by  selecting  them  as  the  ma- 
terials from  which  to  make  legal-tender  money. 

We  have  now  considered  how  money  facilitates  exchanges, 
by  first  helping  one  man  to  get  just  what  the  man  with 
whom  he  wishes  to  trade  wants  to  receive.  The  examples 
recently  given  may  seem  very  simple,  but  the  student  must 
remember  that  these  very  plain  things  are  the  key  to  what 
are  usually  called  "  obscure  questions."  Let  us  carefully 
clear  away  the  underbrush  so  that  we  can  more  easily  chop 
the  large  trees.  A  clear  grasp  of  simple  elementary  princi- 
ples makes  a  person  master  of  the  "  difficulties  "  of  finance. 


8o  SOCIAL  STRUGGLES. 


DEVELOPMENT   OF   MONEY. 


Perhaps  the  use  of  money  can  be  better  understood  by 
considering  the  order  in  which  different  kinds  of  money 
have  been  invented  and  adopted  by  mankind  ;  and,  after 
being  used  a  long  time,  have  slowly  become  obsolete  in  a 
succession  the  reverse  of  that  by  which  they  were  first  em- 
ployed. 

We  have  seen  that  various  articles  have  come  into  use  as 
money  because  experience  taught  mankind  that  they  were 
generally  wanted  ;  and  that  this  demand  arose  from  an  ac- 
quired belief  that  such  articles  were  uncommonly  desirable 
and  valuable.  Furthermore,  we  have  seen  that  the  primi- 
tive idea  of  a  medium  of  exchange  was  something  valuable 
and  generally  wanted,  with  little  reference  to  other  desir- 
able qualities  which  should  be  possessed  by  money.  The 
value  of  grain,  oxen,  bales  of  wool,  slaves  and  other  incon- 
venient kinds  of  money  was  not  estimated  simply  by 
their  utility  as  a  medium  of  exchange,  but  by  their 
usefulness  for  other  purposes.  After  a  long  time,  the  idea 
dawned  upon  our  forefathers  that  money  should  possess 
other  desirable  qualities  in  addition  to  those  aforesaid. 
This  led  to  the  use  of  copper,  iron,  tin,  silver  and  gold,  in 
form  of  dust,  or  rough  pieces  for  money.  After  the  metals 
had  thus  been  used  as  money  for  a  long  time,  another 
idea  occurred  to  our  astute  fathers,  viz.,  the  idea  of  melt- 
ing the  metals  into  pieces  of  convenient  size  for  counting 
and  handling.  These  were  used  a  long  time,  and  then  an- 
other idea  appeared,  viz.,  that  of  stamping  or  marking  the 
pieces  so  that  their  relative  value  could  more  readily  be 
estimated.  Still  another  lapse  of  time  was  necessary  be- 
fore metals  were  converted  into  rude  coins  with  an  image 
and  superscription  thereon.  After  another  long  period,  the 
mechanic  arts  were  developed  sufificiently  to  render  possible 
the  creation  of  the  beautiful  coins  of  the  present  day. 

After  the  metals  had  been  converted  into  coins  bearing 
the  stamp  of  the  sovereign  power,  mankind  discovered  that 
pieces  of  paper,  as  representatives  of  coin,  could  be  used  as 


GROWTH  OF  MONEY.  gl 

money  more  conveniently  than  the  coins  themselves.  Be- 
sides a  multitude  of  lesser  details,  the  present  form  of 
bank-notes  has  passed  through  three  distinct  periods  of 
growth.  The  first  idea  appears  to  have  been  to  deposit 
valuables  in  a  bank  for  safe  keeping,  and  to  have  their 
value  ascertained  and  registered  in  a  book  kept  at  the 
bank.  The  owner  of  these  valuables  then  had  a  bank  credit 
which  he  used  as  money  by  transferring  it,  with  consider- 
able formality,  to  another  person.  Next,  a  certificate  was 
given  to  the  depositor,  payable  only  to  him  or  his  carefully 
authenticated  heirs,  successors  or  assigns.  Then  one  step 
more  was  taken  by  issuing  certificates,  payable  to  bearer 
without  indorsement  or  other  formality. 

Finally,  after  all  the  foregoing  stages  of  the  development 
of  money  had  been  wrought  out,  despite  the  clinging  of  our 
race  to  traditional  ideas,  habits  and  prejudices,  appears  the 
crowning  triumph  of  common  sense  applied  to  finance, — 
legal-tender  paper  money,  difficult  to  counterfeit  and  lim- 
ited in  amount. 

The  teachings  of  history  in  regard  to  the  growth  of  finan- 
cial ideas  are  conclusively  verified  by  the  fact  that  in  differ- 
ent quarters  of  the  globe  all  the  aforesaid  stages  of  devel- 
opment exist  to-day.  Every  portion  of  the  financial  prog- 
ress through  which  we  have  passed  is  now  substantially 
typified  by  the  commercial  thoughts  and  habits  of  some 
nation  or  tribe. 

Even  within  the  limits  of  the  United  States,  nearly  all 
the  aforesaid  stages  of  the  development  of  a  uniform  tend- 
ency to  make  exchanges  in  the  easiest  way,  and  a  growth  of 
knowledge  that  convenient  money  is  just  as  good  as  incon- 
venient money,  are  exemplified  by  money  now  in  use.  We 
have  the  greenback  as  the  most  desirable  kind  of  money. 
Next  lower  in  the  scale  stands  the  national  bank-note  as  the 
type  of  representative  paper  money.  The  era  of  beautiful 
coins  of  metal  is  shown  by  our  gold,  silver  and  nickel  coins. 
The  era  of  cumbrous,  inconvenient  coins  is  symbolized  by 
the  few  old-fashioned  copper  cents  which  still  remain  in  cir- 
culation. The  use  of  bars  of  bullion  as  money  recalls 
6 


$2  SOCIAL  STRUGGLES. 

another  age.  The  employment  of  gold  dust  and  nuggets  of 
gold  as  money  reminds  us  of  a  still  more  primitive  epoch  of 
human  history.  Finally,  the  earliest  kinds  of  money  are  lit- 
erally exhibited  by  those  Indians  who  still  use  skins,  ponies 
and  kindred  things  as  money. 

Usually,  the  monetary  ideas  of  a  community  or  nation 
are  a  correct  index  of  their  intellectual  growth  and  culture 
in  all  other  respects.  This  is  significantly  shown  by  the 
conduct  of  the  emigrants  who  land  at  Castle  Garden. 
Just  in  proportion  to  their  ignorance,  those  persons  eagerly 
desire  heavy  and  inconvenient  metallic  money  in  prefer- 
ence to  national  bank-notes  or  greenbacks. 

An  improved  form  of  money  is  adopted  by  a  nation  only 
when  a  considerable  portion  of  its  people  become  suffi- 
ciently intelligent  to  appreciate  it.  Money  must  be 
adapted  to  the  mental  stature  of  those  who  use  it  ;  hence 
no  sudden  change  from  an  inferior  to  a  superior  kind  of 
money  is  ordinarily  possible,  because  the  growth  of  mone- 
tary ideas  is  simply  a  reflection  of  the  progress  of  public  in- 
telligence in  all  other  respects.  A  long  forward  stride  was 
taken  by  this  country  when  greenbacks  and  national  bank- 
notes superseded  State  bank-notes.  But  in  reality,  this 
was  not  an  exception  to  the  aforesaid  general  law.  For  a 
long  time  the  American  people  had  suffered  great  losses 
and  inconvenience  from  State  banks,  and  thus  had  grad- 
ually been  prepared  to  welcome  a  uniform  national  cur- 
rency. Notwithstanding  this,  national  paper  money  was 
strenuously  resisted  by  capitalists,  and  its  speedy  introduc- 
tion was  only  accomplished  by  the  pressure  and  exigencies 
of  a  terrific  civil  war. 

A  POOR  OLD  THING  IS  PREFERRED  TO  A  GOOD 
NEW  THING. 

The  proclivity  of  mankind  to  prefer  an  old  inferior  article 
to  a  new  superior  one,  and  the  wonderful  vitality  of  a 
human  habit  which  has  once  been  fully  established,  are 
illustrated  in  nothing  more  strikingly  than  in  their  conduct 
in   regard   to  money.     In  all   ages  and   countries,  every  im- 


LOVE  OF  FAMILIAR  FACES. 


83 


provement  in  money  has  been  obstinately  resisted  by  the 
great  majority.  The  old  kind  of  money  was  better  under- 
stood, and  therefore  was  preferred  to  the  new.  When  a 
new  form  of  money  was  invented,  it  merely  added  at  first 
another  name  to  the  list  of  moneys  in  use  ;  the  old  kinds 
of  money  were  not  superseded,  but  continued  in  use  side  by 
side  with  the  new  money.  From  the  time  when  the  first 
improvement  in  money  was  made,  down  to  the  present, 
the  same  process  has  been  going  on.  Several  kinds  of 
money  have  been  simultaneously  in  use;  the  best  kind  of 
money  very  slowly  gaining  ground,  and  the  inferior  kinds  of 
money  slowly  passing  out  of  use.  What  was  at  first  a 
monetary  innovation,  looked  on  with  distrust,  in  course  of 
time  became  an  old  kind  of  money  endeared  to  the  people 
by  long  familiarity.  The  choice  of  the  people  then  lay,  not 
between  a  new  and  an  old  kind  of  money,  but  between  two 
old  kinds  of  money, — the  elder  of  the  two  inferior  to  the 
other.  Then  a  new  form  of  money  appeared,  destined  to 
pass  through  the  same  gradual  process  of  adoption  as  its 
predecessors.  Meanwhile,  the  primitive  kind  of  money  had 
slowly  fallen  into  disuse  by  reason  of  an  increased  employ- 
ment of  the  second  kind  of  money.  In  like  manner,  the 
second  kind  of  money  slowly  faded  out  of  use  because  the 
third  kind  of  money  was  gradually  taking  the  first  place  in 
the  estimation  of  mankind.* 

Step  after  step  the  aforesaid  processes  have  gone  on,  cent- 

*  The  foregoing  sketch  of  the  history  of  money  is  not,  and  is  not  in- 
tended to  be,  chronologically  correct.  It  simply  shows  the  successive 
steps  by  which  monetary  knowledge  has  developed,  when  viewed  from 
its  lowest  stage  to  its  highest,  without  any  reference  to  what  took  place 
in  the  intervening  periods  of  time.  Financial,  like  all  other  kinds  of 
knowledge,  has  followed  a  line  of  alternate  progress  and  recession.  The 
fact  that  the  value  of  a  unit  of  money,  as  money,  depends  on  the  number 
of  those  units  in  circulation  and  not  on  the  materials  of  which  it  is  made, 
was  known  and  acted  on  thousands  of  years  ago  by  the  foremost  nations 
of  the  world.  But  this  fundamental  principle  has  repeatedly  been  lost 
sight  of,  and  the  result  has  followed  which  inevitably  flows  from  the  adop- 
tion of  false  premises ;  viz.,  a  confused  and  erroneous  mode  of  reasoning 
and  action. 


84  SOCIAL  STRUGGLES. 

ury  after  century,  until  the  financial  ideas  of  the  world  have 
reached  their  present  form.  How  very  slowly  and  imper- 
ceptibly we  have  traveled  is  shown  by  the  fact  that  all  the 
gradations  of  money,  from  the  primitive  up  to  the  highest 
form,  are  in  use  to-day.  Moreover,  the  highest  form  of 
money  now  in  use  is  much  smaller  in  amount  than  that  of 
other  and  inferior  kinds  of  money. 

The  past  reflects  inversely  the  image  of  the  dawning  fut- 
ure. Nothing  can  check  the  further  development  of  finan- 
cial methods,  and  an  extension  of  the  knowledge  which 
will  enable  us  to  make  a  better  kind  of  money  than  any  we 
have  thus  far  had,  but  a  check  to  the  progress  of  human 
intelligence. 

WHAT  WE   CAN   REASONABLY   EXPECT. 

In  all  probability,  future  progress  will  resemble  that  of 
the  past,  and  be  so  slow  as  to  be  perceptible  only  by  com- 
paring one  long  period  of  time  with  another.  The  people 
of  this  country  will  be  likely  to  advance  more  rapidly  than 
those  of  any  other.  We  are  now  quite  rapidly  changing 
our  national  habits  of  thought  in  regard  to  money.  The 
use  of  paper  certificates  instead  of  gold  and  silver  coins  is 
increasing,  and  the  people  are  learning  that  a  twenty-dollar 
silver  certificate  is  far  more  convenient  than  a  twenty-dollar 
gold  coin.  Public  opinion  is  slowly  but  inevitably  gravitat- 
ing toward  favoring  the  abolition  of  national  bank-notes 
and  their  replacement  by  an  improved  kind  of  greenbacks. 

During  the  ten  years  just  past  the  financial  branch  of  the 
United  States  Government  has  been  largely  controlled  by 
men  who,  from  ignorance,  from  a  desire  to  aggrandize  a 
small  class,  or  from  both  those  reasons,  have  been  steadily 
trying  to  reverse  our  natural  progress  toward  the  best  and 
most  convenient  money.  Persistent  efforts  have  been,  and 
are  still  being  made,  to  compel  the  use  of  gold  and  silver, 
by  a  people  the  majority  of  whom,  if  allowed  to  follow 
their  own  instincts  and  convenience,  would  not  use  either 
one  of  those  metals.  Fractional  paper  money  has  been 
withdrawn,  silver  certificates  limited,  and  the  number  of  one 


I 


£ 


FACTS  REGARDING  BAN'KERS  85 

and  two-dollar  bills  curtailed,  for  the  purpose  of  preventing 
the  people  from  using  the  kind  of  money  they  prefer. 

BANKERS  AND  MONEY, 

It  is  frequently  said,  "  Bankers  know  most  about  money 
because  they  do  nothing  but  handle  it."  But  a  little  reflec- 
tion shows  that  a  man  may  "handle  "  certain  things  all  his 
life  and  still  be  entirely  ignorant  of  the  scientific  principles 
relating  to  them.  Thus  a  man  may  handle  stones  all  his  life 
and  not  know  anything  about  geology.  A  life  service  as  a 
butcher  does  not  imply  a  knowledge  of  comparative  anat- 
omy. A  dealer  in  chemicals  does  not  consequently  under- 
stand the  science  of  chemistry.  Handling  iron,  copper,  lead, 
and  other  metals  does  not  teach  a  knowledge  of  the  science 
of  metallurgy.  Many  other  illustrations  similar  to  the  fore- 
going could  be  adduced,  all  showing  that  those  whose  daily 
occupation  is  to  "  handle  "  a  particular  thing  are  almost  in- 
variably ignorant  of  the  primary  facts  and  principles  relat- 
ing thereto.  Bankers  are  not  an  exception  to  this  general 
rule. 

AN  IRRESISTIBLE  MOVEMENT. 

The  American  people  have  not  advanced  far  enough  in 
intelligence  to  dispense  with  gold  and  silver  as  a  necessary 
portion  of  their  monetary  system.  But  the  majority  have 
arrived  at  a  stage  of  progress  which  precludes  them  from 
desiring  to  directly  use  either  of  those  metals  as  money. 
They  believe  gold  and  silver  should  be  locked  up  in  vaults 
as  "  a  basis  for  the  issue  of  paper  money."  But  carrying 
around  any  kind  of  metal  in  pockets,- as  money,  is  every 
year  regarded  more  and  more  as  an  inconvenient  relic  of 
barbarism.  The  natural  development  of  the  use  of  paper 
money  has  been  temporarily  thwarted.  But  all  movements 
are  irresistible  whose  impelling  force  is  the  steady  unfold- 
ing of  human  intelligence. 

Improvement  in  the  machinery  of  commerce,  like  all 
other  manifestations  of  human  progress,  resembles  the  com- 
ing of  warm  weather.     When  February  is  past,  the  temper- 


35  SOCIAL  STRUGGLES. 

ature  does  not  rise  steadily  day  by  day,  but  moves  upward 
in  an  irregular  and  intermittent  course.  Even  when  April 
has  arrived,  a  reaction  often  occurs,  of  weather  so  severe 
that  we  should  imagine  midwinter  was  returning,  if  ex- 
perience had  not  taught  us  otherwise.  As  the  past  prog- 
ress of  mankind  has  moved  along  a  zigzag  and  irregular 
line,  we  have  every  reason  to  presume  that  future  achieve- 
ments will  follow  a  similar  course.  Periods  of  apparent 
stagnation,  and  even  of  actual  reaction  toward  barbarism, 
will  inevitably  occur.  But  despite  all  discouragements,  the 
tendency  is  steadily .  toward  wiser  and  better  methods,  in 
financial  as  well  as  in  all  other  fields  of  thought  and  action. 


CHAPTER  VI. 

Origin  of  Prices. — Primitive  Mode  of  Stating  Prices. — Need  of  Com- 
paring all  Things  with  a  Few  Things. — Money  of  Account. — A 
Price  is  always  a  Mode  of  Comparing  one  Thing  with  Another. — 
A  Money  Price  is  always  a  Numerical  Comparison. — Antiquity 
of  Numerical  Comparison.  —Fractional  Money. — Primitive  Mode 
of  Making  Change. — Division  of  Values  one  Function  of  Money. — 
Money  of  Account,  resumed. — How  Value  is  Expressed. — What 
happens  when  Specie  Payments  are  Suspended. — Money  of  Account 
would  Survive  the  Destruction  of  all  Other  Money. — False  Pre- 
dictions.— Weight  of  Coins  is  seldom  Considered. — Rise  and  Fall 
of  Prices. 

Statement  of  a  price  is  a  mode  of  exchanging  thoughts. 
Thought  is  exchanged  first  and  tilings  afterward. 

We  have  sketched  the  manner  in  which  certain  things 
originally  came  to  be  used  as  money.  We  have  also  traced 
the  order  in  which  improvements  have  been  made  in  the 
things  used  as  money,  and  in  doing  this,  have  found  that 
several  things  have  always,  at  the  same  time,  been  used  as 
money.  The  next  step  in  studying  this  subject  is  to  ascer- 
tain how  it  has  been  made  possible  for  mankind,  in  the 
midst  of  such  a  diversity  of  money,  to  learn  each  other's 
ideas  of  the  value  of  a  given  thing,  and  to  state  the  ratio  in 
which  one  thing  should  be  exchanged  for  another. 

The  first  step  in  every  bargain  is  to  estimate  and  compare 
the  value  of  one  thing  with  that  of  another  ;  and  although 
this  may  be  begun  by  one  or  both  parties  independently,  it 
is  always  completed  by  directly  or  indirectly  talking  with  each 
other;  i.  e.,  the  parties  to  a  trade  exchange  thoughts  before 
they  exchange  things.  Therefore,  a  necessary  preliminary 
of  all  bargains  is  an  ability  of  those  who  desire  to  make 
them  to  communicate  clearly  their  thoughts  to  one  another. 
At  present,  we  possess  a  means  of  easily  conveying  our  ideas 
of  value  to  those  with  whom  we  desire  to  trade,  and  we  are 

87 


88  SOCIAL  STRUGGLES. 

now  considering  what  that  means  is,  and  how  we  acquired 
it. 

To  make  the  answer  to  the  above  questions  easier,  let  us 
conceive  a  market-place  frequented  by  a  community  with 
the  most  primitive  ideas  of  commerce.  We  first  observe  a 
number  of  persons  possessed  of  different  things  which  they 
wish  to  exchange,  and  find  among  these  persons  a  variety  of 
opinions  in  regard  to  the  proper  mode  of  stating  the  value 
of  a  thing. 

One  man  would  say  his  goods  were  Avorth  so  much  grain. 
Another  would  name  the  value  of  his  wares  in  meat  ;  and 
another  would  name  a  certain  number  of  sheep  skins  as  the 
worth  of  his  goods.  Naming  the  value  of  goods  in  a  vari- 
ety of  ways  would  make  it  difficult  for  the  different  persons 
in  the  market  to  exchange  thoughts  and  compare  ideas. 

In  other  words,  a  number  of  persons  wish  to  trade  with 
each  other  but  they  have  not  yet  invented  a  commercial 
language  by  means  of  which  one  man's  opinion  of  the  value 
of  his  goods  can  be  so  stated  that  all  other  men  in  the 
market-place  will  readily  understand  him.  We  are  now 
trying  to  learn  how  a  universal  mode  of  stating  values  was 
arrived  at,  and  how  all  persons  came  to  understand  it. 

PRIMITIVE   MODE   OF   STATING   PRICES. 

Let  us  first  see  what  a  man  would  naturally  do  who 
was  without  a  knowledge  of  the  commercial  processes 
which  are  so  familiar  to  us  that  we  use  them  unconsciously. 
Obviously,  he  would  name  the  value  of  a  thing  which  he 
wished  to  dispose  of,  by  the  thing  or  things  which  he 
wished  to  get  in  exchange  for  it.  If  a  man  possessed  of  a 
horse  that  he  thought  was  worth  as  much  as  two  cows,  and 
which  he  wanted  to  exchange  for  two  cows,  were  asked  the 
value  of  his  horse  he  would  naturally  say,  "Two  cows."  A 
man  with  'seven  calves  which  he  wished  to  exchange  for  a 
cow  would  naturally  name  a  cow  as  the  worth  of  his  calves. 
A  man  with  fifty  bushels  of  wheat  which  he  wished  to  ex- 
change for  seventy-five  bushels  of  barley  would  be  likely  to 
state  the    value  of  his  wheat   at   seventy-five  bushels    of 


HOJV  PRICES  BEGAN. 


89 


barley.  Similar  statements  of  value  would  be  made  by 
persons  possessed  of  other  things,  alid  the  result  would  be  a 
confused  medley  of  language  in  regard  to  values,  and 
considerable  trouble  in  making  exchanges,  e\'en  in  a  mar- 
ket-placi  where  a  comparatively  limited  variety  of  things 
was  offered  in  exchange.  Where  only  three  or  four  differ- 
ent things  were  for  sale  or  exchange,  a  mutual  understand- 
ing could  easily  be  reached.  But  the  difficulty  of  making 
appraisals  of  value  and  making  exchanges  would  increase 
with  each  additional  thing  offered  for  exchange. 

This  difficulty  would  arise  from  the  defective  manner  in 
which  the  indispensable  prerequisite  of  every  bargain — viz., 
an  interchange  of  thoughts — was  conducted.  The  language 
of  two  persons  may  be  alike  in  other  respects  and  unlike  in 
regard  to  commercial  matters.  Two  persons  cannot  readily 
exchange  ideas  with  each  other  unless  they  both  apply  a 
similar  meaning  to  the  same  words  or  phrases.  Further- 
more, statements  which  require  reflection  and  computations 
to  interpret  them  do  not  convey  commercial  information 
with  sufficient  rapidity,  clearness  and  precision  to  meet  the 
wants  of  the  multitude  who  wish  to  exchange  things  with 
each  other.  Consequently,  to  a  large  extent,  the  different 
persons  in  the  aforesaid  case  who  wished  to  trade  would 
not  be  able  to  make  themselves  perfectly  understood  by 
each  other,  and,  as  a  necessary  result,  the  relative  value  of 
different  things — the  ratio  in  which  one  thing  should  be 
given  for  another — would  be  arrived  at  with  great  difficulty. 

NEED    OF   COMPARING   ALL   THINGS   WITH   A   FEW   THINGS. 

Even  a  person  possessed  of  our  present  facilit)-  of  esti- 
mating values,  and  computing  and  changing  the  value  of 
one  thing  into  that  of  another,  would  be  somewhat  puzzled 
if,  on  taking  a  walk  through  a  business  street,  he  should  ask 
the  price  of  a  stove  and  be  told,  "  Ten  sheep  skins."  He 
would  be  still  more  perplexed  if  he  asked  the  price  per 
yard  of  certain  cloth  and  were  told,  "  A  dozen  eggs  ;  "  or, 
if  he  asked  the  price  of  a  hat  and  were  informed  that  it 
was  very  cheap  at  the  price  ,    viz.,  "  A  four-weeks-old  pig." 


go  SOCIAL  STRUGGLES. 

His  knowledge  of  commercial  arithmetic  would  be  still  fur- 
ther drawn  on  if  he  asked  a  laborer  in  search  of  employ- 
ment how  much  wages  he  asked  per  day,  and  should  be  told, 
"  A  bushel  of  corn ; "  or,  if  he  asked  the  price  of  a  dressed 
sheep,  and  was  informed  that  it  was  worth  "  two  bushels  of 
wheat." 

The  foregoing  example  may  seem  queer,  but  we  must 
remember  that  it  illustrates,  in  substance,  precisely  the  dififi- 
culties  which  our  ancestors  once  had  to  contend  with.  The 
reader  will  note  that  the  perplexity  of  the  aforesaid  inquirer 
of  prices  arose  chiefly  from  the  fact  that  no  two  persons 
who  offered  goods  for  sale  compared  them  with  the  same 
thing,  and  consequently  the  buyer  failed  to  readily  under- 
stand the  comparative  amount  of  value  which  was  meant 
by  the  various  statements  of  price. 

When  a  person  puts  a  price  on  a  thing,  he  thereby  states 
that  in  his  opinion  the  value  of  that  thing  is  equal  to  the 
thing  named  as  the  price.  If  a  man  mark  two  dollars  as 
the  price  of  a  hat,  that  is  equal  to  saying :  This  hat  is 
worth  as  much  as  two  dollars  ;  or.  This  hat  is  the  price  of 
two  dollars. 

If  all  the  aforesaid  persons  who  were  asked  the  value  of 
their  goods  had  stated  the  price  in  corn,  or  any  other  one  of 
the  various  things  used  as  money,  the  man  who  wished  to  pur- 
chase could  readily  learn  the  value  of  the  one  thing  with 
which  all  other  things  were  compared.  He  could  then  exer- 
cise his  own  judgment  by  comparing  this  one  tiling  with 
the  various  things  on  which  a  price  was  fixed,  and  thus 
determine  whether  those  things  were  equal  in  value  to 
the  price.  Therefore  the  root  of  the  difficulty  we  are  de- 
scribing lies  in  the  fact  that  the  man  with  things  to  sell  uses 
language  in  naming  prices  which  is  not  fully  understood 
by  the  man  who  contemplates  buying. 

When  "this  occurs,,  although  the  language  of  these  two 
men  may  be  alike  in  other  respects,  they  will  fail  to  fully 
understand  each  other,  for  a  similar  reason  that  a  man  who 
talks  French  will  not  be  able  to  fully  state  his  ideas  to  a 
man  who  can  understand  nothing  but  English. 


STATING  AND  COMPUTING  PRICES. 


MONEY    OF   ACCOUNT. 


91 


In  the  early  history  of  our  race  the  number  of  things 
offered  for  exchange,  at  first,  was  very  small  and  must  have 
increased  very  slowly.  Therefore  the  necessity  of  solving 
the  problem  of  naming  a  price  so  that  it  would  be  easily 
understood  came  upon  our  fathers  by  a  slow  process. 
When  it  came,  an  invention  was  made  which  has  been  so 
long  and  so  commonly  in  use  that  the  great  majority  use  it 
without  thinking  it  once  had  a  beginning.  Our  ancestors 
invented  a  commercial  language, — a  uniform  mode  of  stating 
ideas  of  the  worth  of  a  thing,  by  the  use  of  which  two  men 
can  converse  concerning  the  relative  value  of  different 
things,  and  be  at  once  understood  by  each  other.  This  in- 
vention consists  of  certain  words  or  terms  to  which  the  per- 
sons forming  a  community  or  nation  agree  to  give  a  uniform 
meaning,  and  to  use  them  exclusively  when  stating  their 
ideas  concerning  the  valife  of  things.  These  terms,  there- 
fore, constitute  the  uniform  language  adopted  by  a  com- 
munity or  nation  in  which  values  are  estimated,  prices 
stated,  accounts  kept,  and  all  financial  conversation  carried 
on.  This  is  the  money  of  account, — the  peculiar  terms 
used  by  a  people  in  stating  prices,  and  conducting  all  other 
commercial  transactions.  Each  nation  has  adopted  a  finan- 
cial language  more  or  less  peculiar  to  itself  which  has  been 
called  the  "  money  of  account,"  because  it  is  the  mode  in 
which  computations  are  made  and  accounts  kept  in  that 
nation. 

We  use  dollars  and  cents  as  our  money  of  account;  we 
state  all  prices  in  dollars  and  cents,  and  compute  and  keep 
all  accounts  in  the  same  way.  Great  Britain  uses  pounds, 
shillings  and  pence  just  as  we  use  dollars  and  cents  ;  Ger- 
many computes  values  in  marks  ;  France  keeps  accounts  in 
francs  ;  and  every  other  nation  has  it§  peculiar  money  of 
account.  Although  each  different  nation  has  always  used 
words  different  from  those  used  by  other  nations,  as  a  com- 
mon mode  peculiar  to  itself  of  stating  prices  and  keeping 
accounts,  this  important  fact  should  be  noted,  viz.  :    TJie  sub- 


92 


SOCIAL  STRUGGLES. 


stance  of  all  moneys  of  aceoiDit,  in  every  age  and  nation,  is  a 
practical  mode  of  expressing  the  same  fundamental  idea. 

In  order  to  understand  this  idea  more  clearly,  let  us  dis- 
sect it  into  its  component  parts.  The  first  portion  of  it 
consists  of  the  undeniable  fact  that  it  is  absolutely  impossi- 
ble to  really  define  or  state  the  worth  of  a  thing  otherwise 
than  by  comparing  it  with  some  other  thing. 

The  second  portion  of  this  idea  consists  of  the  kindred 
fact  that  although  a  variety  of  methods  may  be  employed 
whereby  the  value  of  some  things  may  be  compared  with 
the  value  of  some  other  things — as,  for  instance,  one  thing 
may  be  said  to  be  as  fine,  or  as  rich,  or  as  large  as  another — 
yet  there  is  only  one  universal  method  of  comparison  by 
which  the  value  of  one  thing  can  be  compared  with  the 
value  of  all  other  things,  viz.,  the  numerical  mode  of  com- 
parison. That  is  to  say,  the  worth  of  all  things  can  be  com- 
pared with  the  worth  of  all  other  things,  by  saying  that  a 
given  thing  is  worth  one-quarter,  or  some  other  fraction 
of  the  value  of  another  thing  ;  or,  by  saying  that  a  given 
thing  is  worth  ten  times  (or  some  other  number  of  times) 
as  much  as  another  thing. 

The  third  portion  of  the  aforesaid  idea  is  that  since  a 
comparison  of  some  kind  is  the  only  way  in  which  the  worth 
of  a  thing  can  be  estimated  or  stated,  it  is  desirable  that  the 
method  of  making  comparisons  should  be  the  one  which 
admits  of  universal  application,  viz.,  the  numerical  method- 
Furthermore,  it  is  essential  that  all  persons  who  make  nu- 
merical comparisons  of  value  should  use  the  same  numeral 
or  unit  as  a  standpoint  from  which  to  start  in  comparing 
one  thing  with  another. 

The  fourth  portion  of  the  said  idea  is  that,  as  it  is  im- 
possible to  estimate  the  worth  of  anything  absolutely,  the 
unit  of  value,  or  numeral,  from  which  and  by  which  all 
comparisons  of  value  are  made  must  be  an  assumed  and 
arbitrary  one  ;  that  is,  it  may  be  symbolized,  but,  in  the 
outset,  it  can  have  no  real  existence,  because  there  is  nothing 
except  the  imagination  from  which  to  construct  it. 

Therefore    all    civilized    nations  have  assumed    that    the 


A  PRICE  IS  A  comparison: 


93 


numeral  "  ONE  "  was  the  proper  arbitrary  standard  of  value 
from  which  to  start  in  making  comparisons  of  value.  This 
imaginary  standpoint  has  been  given  a  concrete  form  by 
calling  it  one  pound,  one  rouble,  one  mark,  one  franc,  one 
dollar,  and  a  variety  of  other  names.  But  in  all  cases,  its 
essential  characteristic  is  one  and  the  same  thing,  because 
all  the  different  names  aforesaid  are  simply  different  ways  of 
naming  the  national  monetary  numeral,  or  unit  of  value. 

A   PRICE    IS   ALWAYS   A   MODE   OF     COMPARING   ONE   THING 
WITH   ANOTHER. 

The  above  four  fragments,  when  combined,  are  the  basis 
of  the  greatest  monetary  invention  ever  devised  by  man- 
kind. Let  us  now  see  if  the  foregoing  statements  can  be 
further  elucidated  by  an  illustration.  L  has  ten  sheep,  all 
alike,  which  he  wishes  to  sell.  M  comes  along  and  asks  L 
how  much  a  sheep  is  worth.  If  L  should  reply  that  "  a 
sheep  was  worth  a  sheep  "  he  would  convey  no  idea  except 
to  raise  a  doubt  of  his  own  sanity  or  wisdom.  M  might  then 
say  :  "  I  knew  before  I  spoke  to  you  that  at  the  same  time 
and  place  one  thing  is  always  worth  a  precisely  similar  thing  ; 
therefore  one  sheep,  at  the  same  time  and  place,  is  always 
worth  a  precisely  similar  sheep.  Please  drop  nonsense  and 
tell  me  ivkat  one  sheep  is  worth  in  such  language  that  I 
will  be  able  to  understand  you." 

A  moment's  reflection  shows  that  the  only  possible  way 
for  L  to  state  his  idea  of  the  worth  of  one  of  his  sheep  is  to 
compare  it  with  something  else  besides  one  of  its  fellow 
sheep.  Furthermore,  it  is  apparent  that  the  easiest  and 
most  intelligible  way  of  comparing  its  worth  with  the 
worth  of  something  else  is  to  do  so  by  using  numbers. 
Thus  L  may  say  :  "  This  sheep  is  worth  ten  geese."  That 
would  be  equivalent  to  saying  that  this  sheep  was  worth 
ten  times  as  much  as  one  goose.  L  might  say  :  "  This 
sheep  is  worth  fifteen  bushels  of  oats."  That  would  be 
equivalent  to  saying  that  the  sheep  was  worth  fifteen  times 
as  much  as  one  bushel  of  oats.  Suppose  M  should  ask  L 
if  he  would  sell  all  his  sheep  for  a  cow.     If  L  said  yes,  that 


94 


SOCIAL  STRUGGLES. 


would  be  -simply  another  way  of  stating  his  opinion  that 
one  of  his  sheep  was  worth  one-tenth  as  much  as  a  cow. 

Two  facts  appear  at  once  from  the  foregoing  considera- 
tions. First,  no  matter  what  intelligible  method  or  words  L 
may  adopt  or  use  to  give  his  idea  of  the  worth  of  his  sheep, 
they  all  necessarily  involve  a  comparison  of  the  sheep  with 
something  else,  and  a  statement  of  the  ratio  i-n  which  he 
thinks  a  sheep  should  be  given  in  exchange  for  something 
else. 

Second,  it  is  evident  that  L  and  M,  in  carrying  on  their 
bargaining,  will  more  readily  understand  each  other  if  they 
steadily  use  the  same  object  in  making  all  their  comparisons 
of  value.  Furthermore,  it  is  clear  that  by  exclusively  using 
the  object  designated  by  the  common  consent  of  the  whole 
community  as  the  best  one  thing  with  which  to  compare  all 
other  things,  they  can  exchange  ideas  still  more  easily. 

A  MONEY  PRICE  IS  ALWAYS  A  NUMERICAL  COMPARISON. 

The  aforesaid  two  facts  substantially  embody  what  ob- 
servation and  experience  have  taught  mankind  is  the  best 
manner  of  making  statements  of  value.  In  this  country  L 
would  use  the  term  "  one  dollar,"  as  the  money  of  account 
and  the  unit  from  which  to  start  in  making  all  comparisons 
of  value.  He  would  say  :  "  A  sheep  is  worth  so  masy  dol- 
lars and  such  a  fraction  of  one  dollar."  In  England  L 
would  employ  the  term  "  one  pound,"  as  the  unit  from 
which  and  by  which  to  make  all  comparisons  of  value.  In 
Germany,  L  would  use  as  the  money  of  account  and  unit  of 
value,  "  one  mark  "  ;  and  all  his  conversation  would  steadily 
refer  to  "one  mark"  and  to  fractions  of  one  mark.  No 
matter  what  country  he  may  be  in,  nor  what  terms  he  use, 
L  would  constantly  make  all  statements  of  value  by  a 
numerical  comparison  of  the  thing  on  which  a  price  was 
thus  put  with  an  adjective  which  would  mean  "one."  The 
name  succeeding  this  adjective  would  depend  simply  on 
the  custom  of  the  locality,  and  not  on  any  difference  in  the 
principle  involved. 


HOW  SA  FACES  NAME  PRICES. 


ANTIQUITY   OF   NUMERICAL   COMPARISON. 


95 


Having  found  that  all  civilized  peoples  of  the  world  com- 
pute values  by  a  numerical  method,  it  would  be  interesting 
to  know  just  when  they  first  began  to  do  so.  There  are 
several  tribes  now  living  which  use  the  numerical  method  of 
reckoning  values  who  are  so  low  in  the  scale  of  intelligence 
that  they  have  no  written  history.  They  compare  the  value 
of  all  things  with  a  skin,  a  canoe,  or  a  weapon  of  some  kind, 
or  with  some  other  thing  with  which  they  make  exchanges 
and  are  familiar.  It  is  only  a  short  time  since  the  Indians 
of  this  country  used  a  beaver  skin  as  the  unit  of  value  and 
the  money  of  account.  These  facts  give  us  reason  to  pre- 
sume that  the  numerical  method  of  reckoning  value  is  older 
than  human  history. 

The  fact  that  some  nations  use  units  of  value  which  are 
widely  different  from  those  of  other  nations  is  an  unimport- 
ant detail.  The  intent,  object  and  result  of  doing  certain 
acts  are  usually  more  important  than  the  manner  in  which 
those  acts  are  done.  The  Portuguese  unit  of  value  is  so 
small  that  no  necessity  arises  for  dividing  it.  The  principle 
involved  is  the  same,  whether  the  unit  with  which  all  values 
are  to  be  compared  is  equal  to  the  worth  of  one  month's 
labor  or  one  hour's  labor ;  or  whether  its  representative 
weighs  one  pound  or  a  fraction  of  an  ounce.  Furthermore,  it 
makes  no  real  difference  how  the  number  of  these  units  is 
ascertained, — whether  by  counting  or  weighing  them.  A 
uniform  agreement  by  a  people  to  reckon  the  value  of  all 
things  by  comparing  them  in  a  numerical  ratio  with  one 
thing  is  the  substance  of  the  matter  now  under  examination. 

FRACTIONAL    MONEY. 

We  have  heretofore  found,  at  an  early  period  in  the  be- 
ginning of  commerce,  the  adoption  of  an  arbitrary  or  con- 
ventional unit  of  value,  which  is  multiplied  and  (unless  the 
unit  is  very  small)  divided  into  fractions  as  circumstances 
may  require.  Let  us  now  examine  the  special  function  and 
use  of  these  fractions  of  the  unit  of  value. 


^6  '  SOCIAL  STRUGGLES. 

When  men  first  began  to  barter  with  each  other  they 
frequently  met  with  a  practical  difficulty  which  we  have 
thus  far  omitted  to  consider.  That  difficulty  is  the  equita- 
ble exchange  of  things  possessed  of  unequal  values  and 
which  it  is  not  practicable  to  divide. 

A  has  a  buffalo  skin  which  he  wishes  to  exchange  with 
B  for  some  rice.  In  this  case  a  fair  trade  could  easily  be 
made,  because  the  rice,  without  injuring  it,  can  be  divided 
into  such  an  amount  as  equals  the  worth  of  the  skin.  But 
suppose  A  wishes  to  exchange  a  buffalo  skin  for  an  ax  and 
the  ax  is  deemed  worth  two-thirds  the  value  of  the  skin. 
The  first  thought  would  be  to  cut  off  one-third  of  the  skin 
and  give  the  two-thirds  for  the  ax.  It  takes  but  little 
reflection  to"  show  that  such  a  course  would  spoil  the  buf- 
falo skin. 

Let  us  suppose  another  example.  D  has  a  cow  which  he 
w'ishes  to  exchange  with  E  for  a  colt.  After  D  and  E  have 
talked  about  the  matter  and  compared  the  values  of  the 
two  animals  they  conclude  that  the  colt  is  worth  one-quar- 
ter more  than  the  cow.  What  is  then  to  be  done  ?  For  E 
to  take  the  cow,  and  after  slicing  off  one-quarter  of  the  colt 
give  D  the  remainder,  is  certainly  impracticable.  The  ne- 
cessity has  arisen  of  doing  what  we  now  call  "  making 
change  "  or  "  giving  boot."  This  necessity  arises,  when  two 
things  exchanged  are  of  such  unequal  value  that  something 
must  be  given  in  addition  to  the  least  valuable  one,  in 
order  to  do  justice  to  the  person  who  parts  with  the  most 
valuable  one. 

In  early  times,  a  problem  similar  to  that  above  presented 
would  have  been  solved  by  D  giving  E  a  couple  of  sheep,  a 
yearling  heifer,  or  some  similar  thing  in  addition  to  the 
cow  to  make  the  bargain  even.  This  mode  of  making 
change  was  undoubtedly  in  use  for  a  long  time.  In  fact,  it 
has  been  used  to  a  considerable  extent  in  this  country 
within  the  memory  of  persons  now  living.  During  the  first 
portion  of  the  late  civil  war,  when  silver  coins  had  disap- 
peared from  circulation  and  the  fractional  paper  currency 
had  not  yet  been  issued,  we  were  on  the  verge  of  a  general 


MAKING  SMALL  PAYMENTS. 


97 


\ 


return  to  the  primitive  method  of  making  change.  Postage 
stamps,  car  tickets,  dinner  tickets,  stage  tickets,  and  a  variety 
of  similar  things  were  rapidly  coming  into  use  as  fractional 
money. 

When  New  Orleans  was  taken  possession  of  by  the 
troops  under  command  of  General  Butler,  the  soldiers, 
when  shopping,  frequently  used  as  change,  at  the  request 
of  the  shopkeepers,  the  large  hard  crackers  which  formed 
their  bread  ration.  In  various  cities  throughout  the 
Northern  States  a  considerable  number  of  individuals,  cor- 
porations and  railroad  companies  started  mints  of  their  own, 
and  began  to  make  small  brass  and  pewter  coins  of  differ- 
ent kinds  with  a  variety  of  inscriptions  thereon.  These 
were  put  into  circulation  as  fractional  money  and  continued 
in  use  until  the  United  States  Government  passed  a  law 
prescribing  severe  penalties  against  any  person  who  made 
or  used  them  as  money. 

PRIMITIVE   MODE   OF   MAKING   CHANGE. 

The  use  of  pigs,  chickens,  eggs,  calves,  and  similar  arti- 
cles for  making  change  and  other  small  payments  is  at- 
tended with  great  inconvenience  and  expense.  M.  Wolow- 
ski  has  told  us  that  several  years  ago  Mademoiselle  Zelie, 
a  noted  singer,  made  a  professional  tour  in  various  coun- 
tries and,  in  the  course  of  her  travels,  gave  a  concert  in  the 
Society  Islands.  The  bargain  with  the  manager  of  the 
entertainment  gave  her  one-third  of  the  receipts  for  her 
services.  When  her  share  was  counted,  it  was  found  to 
consist  of  twenty-three  turkeys,  three  pigs,  forty-four  chick- 
ens, five  thousand  cocoa-nuts,  and  a  quantity  of  bananas, 
oranges  and  lemons.  A  portion  of  this  "  small  change  " 
was  consumed  by  Mademoiselle  and  her  servants,  and 
meantime  the  remaining  pigs  and  poultry  were  fed  with  the 
fruit. 

This  incident  illustrates  both  the  inconvenience  of  primi- 
tive money  and  the  importance  of  having  a  kind  of  money 
which  will  enable  those  who  possess  it  to  divide  values  into 
small  and  regular  fractions  of  an  assumed  unit,  and  to 
7 


98 


SOCIAL  STRUGGLES. 


reckon  such  a  division.  Much  inconvenience  must  often 
result  if,  when  things  are  exchanged  of  unequal  value,  arti- 
cles of  different  and  unequal  size,  quality  and  value  are 
used  for  making  change  and  paying  small  balances.  This 
is  not  simply  because  the  articles  used  for  paying  balances 
in  such  cases  have  different  values,  but  because  these  val- 
ues would  be  so  irregular  as  not  to  have  a  constant  relation 
and  easily  understood  ratio  of  value  to  each  other. 

For  example,  K  might  desire  to  exchange  two  sheep  with 
L  for  a  heifer.  Upon  appraisal  of  value,  suppose  K  and  L 
decided  that  the  heifer  was  worth  the  sheep  and  the  value 
of  half  a  sheep.  In  such  case,  after  giving  L  the  sheep  K 
would  still  owe  a  balance  to  L  of  half  the  value  of  a  sheep. 
The  question  would  arise  how  to  pay  it.  K  might  have  a 
pig  to  give  for  his  debt,  but  the  pig  might  be  considered 
worth  more  than  half  a  sheep.  Or,  he  might  desire  to  give 
a  turkey  for  change  but  upon  reflection  find  that  it  was  not 
worth  quite  enough. 

All  the  above  and  kindred  difficulties  are  removed  by  the 
adoption  of  a  unit  pf  value,  and  by  dividing  this  unit  into 
small  and  regular  fractions.  It  is  obvious  that  a  system 
which  admits  of  the  division  of  value  into  fractions  of  a 
definite  and  uniform  size,  can  also  be  used  to  gather  these 
fractions  of  value  and  put  them  together  again  into  wholes. 
This  is  shown  by  the  way  we  use  our  unit  of  value.  It  is 
very  easy  to  multiply  the  figure  "  one "  by  any  number. 
Therefore  an  estimate  of  the  value  of  anything,  no  matter 
what  it  is,  nor  how  great  its  value,  can  readily  be  stated  at 
so  many  units. 

If  an  appraisal  of  a  thing  place  its  value  at  less  than  one 
unit,  or  at  a  given  number  of  units  and  a  portion  of  another 
unit,  we  then  divide  the  unit  into  one  hundred  equal  parts 
and  say :  This  thing  is  worth  so  many  units  and  such  a 
hundredth  part  of  a  unit ;  or  we  say,  Such  a  thing  is  worth 
so  many  hundredths  of  a  unit. 

The  foregoing  is  what  we  really  do  and  what  we  actually 
mean.  But  other  terms  are  usually  employed,  and  we  say : 
"  This  thing  is  worth  so  many  dollars  and  so   many  cents." 


I 


DIVISION  OF  PRICES  AND   VALUES. 


99 


This  method  of  comparnig  all  values  with  the  unit  "  one," 
and  of  dividing  this  "  one  "  into  one  hundred  equal  parts, 
enables  us  to  state  all  kinds  of  prices,  make  both  large  and 
small  payments,  and  pay  small  fractional  balances  accu- 
rately, without  inconvenience.  It  also  gives  those  who 
chance  to  receive  more  fractions  of  a  dollar  than  they  want, 
the  ability  to  readily  convert  them  into  whole  dollars  when- 
ever they  desire. 

In  substance,  those  who  employ  the  monetary  systems  of 
other  civilized  nations  use  their  units  of  value  as  we  do  our 
dollars.  For  instance,  the  Englishman  breaks  up  the  na- 
tional unit,  the  pound,  first  into  twenty  equal  parts,  which 
he  calls  shillings.  If  required,  he  next  breaks  up  each  of 
these  fractions  into  twelve  parts,  which  he  calls  pence  ;  and 
if  further  division  be  necessary  he  breaks  each  of  these  frac- 
tions into  four  parts,  called  farthings.  When  this  is  done, 
he  has  divided  the  unit  into  nine  hundred  and  sixty  pieces, 
and  as  these  pieces  have  a  regular  and  uniform  relation  to 
each  other,  there  is  little  difficulty  in  putting  them  all 
together  again  into  one  pound. 

Although  the  English  and  American  money  of  account, 
the  pound  and  the  dollar,  rest  on  essentially  the  same  prin- 
ciple, our  money  has  one  practical  superiority,  viz.,  there  is 
less  arithmetic  about  it.  We  compute  all  values  and  break 
up  our  unit  into  fractions  by  the  decimal  system,  the 
easiest  mode  of  computation  ever  devised  by  man. 

DIVISION   OF   VALUES    ONE    FUNCTION   OF   MONEY. 

The  division  of  values  into  fractions  for  the  purpose  of 
making  small'  payments  and  paying  small  balances  is  one 
of  the  chief  uses  and  functions  of  money.  In  fact,  more 
money  is  actually  used  for  those  purposes  than  for  making 
large  payments  and  paying  large  balances.  The  larger 
payments  are  mostly  made  by  what  we  do  not  call  money 
at  all,  viz.,  checks  and  drafts.  Moreover,  the  larger  pay- 
ments are  made  less  frequently,  and  only  by  the  wealthier 
classes ;  whereas  the  small  payments  are  constantly  made 
by  the  w^iole  population. 


jOO  SOCIAL  STRUGGLES. 

Ability  to  readily  divide  values  into  fractions  of  a  com- 
monly recognized  whole  unit  furnishes  a  means  whereby 
the  prices  of  all  things,  no  matter  how  small  or  how  large 
their  amount,  can  be  readily  stated  and  understood.  By 
dividing  the  unit  into  a  considerable  number  of  regular 
fractions,  the  slight  daily  fluctuations  and  changes  which 
prices  constantly  undergo  can  be  easily  registered. 

Division  of  the  unit  into  pieces  of  a  uniform  proportion 
to  each  other  enables  the  owner  of  one  thing  to  transform 
it  into  units  of  money,  and  then  divide  and  exchange  it  for 
such  number  and  variety  of  other  things  as  its  value  and 
his  wishes  may  determine.  It  also  furnishes  an  aid  for 
comparing  the  value  of  one  thing  of  little  value  Math 
another  thing  of  little  value,  and  of  estimating  the  ratio  in 
which  they  should  be  exchanged  for  each  other.  Further- 
more, it  renders  it  possible  to  translate  all  kinds  of  values 
and  prices  from  one  kind  of  money,  and  reckon  them  in 
another  kind  of  money  ;  to  multiply  the  value  of  one  thing 
which  is  expressed  in  fractions  by  the  numbers  of  that 
thing,  and  thus  find  their  aggregate  value  ;  and  to  add, 
subtract  and  compute  the  fractional  values  transferred  in 
a  great  number  of  exchanges,  and  ascertain  the  final  result. 

MONEY   OF  ACCOUNT,   RESUMED. 

Having  considered  how  the  assumed  unit  of  value  of 
different  nations  is  divided  for  convenience  into  fragments, 
the  value  of  each  one  of  which  has  a  uniform  proportion  to 
the  value  of  the  whole  unit,  we  can  now  resume  our  study 
of  money  of  account. 

All  civilized  nations  have,  in  substance,  at  least  three 
kinds  of  money :  First.  The  imaginary  money,  the  money 
of  account,  in  the  language  of  which  all  accounts  are 
kept  and  recorded,  and  by  the  help  of  which  all  values 
are  estimated  and  compared  with  one  another.  Second. 
The  current  money,  the  money  actually  in  use  and  cir- 
culation. This  may,  and  often  does  consist  of  several  dif- 
ferent kinds  of  money,  and  those  varieties  of  money  may 
be  more  or    less  intermina"led    in    all    commercial    transac- 


\ 


HOW  WE  STATE  IDEAS  OF  VALUE.  jqi 

tions.  Third.  The  national  standard  of  coinage  ;  or,  the 
national  legal-tender  money.  This  may  consist  of  one 
kind  of  money  ;  or,  it  may  consist  of  several  kinds  of  legal- 
tender  money. 

The  national  money  of  account  necessarily  consists  of 
one  kind  of  money,  to  the  unit  and  fractions  of  which  the 
same  terms  are  always  applied.  But  the  second  and  third 
kinds,  aforesaid,  may  embrace  a  great  variety  of  different 
moneys.  All  of  the  said  three  kinds  of  money  may  be  sepa- 
rate and  distinct  ; — they  may  be  substantially  incorporated 
in  one  and  the  same  thing  ;  or,  they  may  be  all  three  es- 
sentially blended  in  two  different  kinds  of  money. 

Let  us  now  dissect  and  illustrate  the  foregoing  state- 
ments. To  those  who  have  not  thought  about  it,  nothing 
seems  much  more  absurd  than  the  idea  of  an  imaginary 
money  of  account  and  an  imaginary  unit  of  value. 

HOW    VALUE    IS    EXPRESSED. 

Upon  reflection,  we  observe  that  in  comparing  and  stat- 
ing values  we  cannot  do  as  when  defining  colors,  for  in  such 
case  we  have  an  absolute  standard  before  us  ;  viz.,  the 
colors  of  the  rainbow,  the  colors  of  light.  We  can  say  this 
is  red,  this  is  yellow,  and  so  on,  simply  because  we  possess 
an  unchangeable  standard  of  color.  But  value,  as  we  shall 
hereafter  demonstrate,  is  a  mental  perception  of  the  worth 
of  a  thing.  Therefore  it  is  impossible  to  say  of  a  thing, 
this  is  absolute  value.  We  might  as  well  attempt  to  pre- 
cisely define  and  put  in  concrete  and  material  form  all 
other  mental  conceptions  and  emotions,  and  after  our  labors 
were  completed  say  :  This  is  hate,  this  is  love,  this  is  fear, 
and  so  on.  We  can  symbolize  and  typify  a  human  thought 
or  emotion  by  making  a  material  form  which  we  imagine  is 
a  correct  representation  of  it.  For  example,  beauty  is  a 
mental  perception  of  harmonious  proportions  and  colors. 
We  can  make  ^  thing  which  in  a  partial  sense  materializes 
this  thought.  Such  a  thing  we  call  beautiful, — but  it  is 
not  beauty,  in  the  abstract,  because  that  is  as  intangible  as 
any  other  thought.     A  "beautiful  "  thing  is  merely  a  sym- 


102  SOCIAL  STRUGGLES. 

bol  of  an  idea.  Men's  ideas  of  beauty  differ.  Therefore, 
what  to  one  man  is  a  symbol  of  beauty,  to  another  man  is 
the  reverse  of  beautiful. 

Thus  we  see  two  facts :  First.  Value  cannot  be  put  in 
material  form  except  as  a  symbol  of  an  idea.  Second.  As 
it  is  necessary  in  comparing  values  to  start  somehow  or 
somewhere,  we  are  driven  to  assuming  and  imagining  an  ar- 
bitrary unit  of  value  from  which  to  date  and  make  all  our 
comparisons. 

The  correctness  of  the  foregoing  statements  is  shown  by 
the  fact  that  the  unit  of  value,  the  starting-point  of  the 
money  of  account  of  several  nations,  has  been  employed  to 
compare  and  reckon  values  a  countless  number  of  times 
without  even  attempting  to  give  it  a  material  symbol. 
Thus  the  British  pound  sterling  has  been  a  money  of  ac- 
count for  many  centuries,  but  the  first  "pound  "  was  put  in 
symbolic  form  when  the  sovereign  was  coined  in  1816. 
The  rouble  was  the  Russian  money  of  account  for  a  long 
time  before  the  reign  of  Peter  the  Great,  when  a  piece  of 
money  called  "a  rouble  "  was  first  coined. 

The  unit  of  the  money  of  account  of  Portugal  is  called  a 
"  rei."  But  no  coin  called  a  rei  has  ever  been  made.  The 
rei  is  an  imaginary  money  of  account,  which,  unlike  most 
other  moneys  of  account,  has  never  had  a  symbolic  represent- 
ative. The  unit  of  value  and  money  of  account  of  Spain 
for  a  long  time  wasthe  "  maravedis."  But  no  such  coin  as 
the  "maravedis"  ever  existed, — it  was  a  purely  imaginary 
money  without  any  concrete  representative.  In  this  coun- 
try we  frequently  employ  the  thousandth  part  of  a  dollar  in 
reckoning  and  stating  values.  But  no  one  ever  saw  a  mill, 
— it  is  simply  an  imaginary  piece  of  money.  We  can  men 
tally  create  the  hundredth  part  of  a  mill  just  as  readily  as 
we  can  iroagine  the  tenth  part  of  a  cent. 

Other  examples  of  a  purely  imaginary  money  of  account 
might  be  cited,  but  those  above  given  are  sufficient  to  illus- 
trate the  principle  we  are  examining. 


HOW  IVE   TRADE   WITHOUT  COINS.  jq^ 


WHAT   HAPPENS    WHEN   SPECIE    PAYMENTS   ARE    SUS- 
PENDED. 

It  almost  invariably  happens,  whenever  a  nation  is  suffer- 
ing from  a  very  severe  and  exhausting  war,  that  what  is 
called  "  a  suspension  of  specie  payments"  occurs.  That 
is :  the  money  which  forms  the  national  standard  of  coin- 
age, the  coins  which  most  persons  suppose  do  not  represent 
anything,  but  are  of  themselves  units  of  absolute  *'  intrinsic 
value,"  cease  to  circulate.  People  in  the  market-places  can 
no  longer  sell  goods  and  receive  what  is  commonly  called 
"  intrinsic  value"  in  exchange  therefor. 

Under  such  circumstances,  if  the  prevailing  ideas  about 
money  were  correct,  the  people  would  at  once  be  deprived 
of  all  their  money, — their  means  of  "  measuring  values  " 
and  reckoning  accounts  would  be  gone,  and  commerce 
would  cease,  except  the  limited  amount  which  could  be  car- 
ried on  by  what  the  nation  would  be  forced  to  return  to, — 
primitive  barter.  And,  as  heretofore  seen,  in  proportion  as 
population  grows  numerous  and  commerce  complex,  ex- 
changes by  means  of  barter  grow  more  and  more  inconven- 
ient and  difficult. 

But,  we  know  from  experience  that  the  disuse  of  stand- 
ard coins  does  not  interrupt  commerce  for  an  hour.  Trade 
goes  steadily  on, — people  continue  to  buy  and  sell,  and  all 
values  are  compared  and  reckoned  in  the  same  terms  as 
when  the  coins  were  in  use.  This  undeniable  fact  is  read- 
ily explained  when  it  is  remembered  that  before  "  suspen- 
sion "  commerce  was  essentially  carried  on  by  the  imaginary 
money  of  account  ;  and  after  suspension  it  was  carried  on 
in  the  same  way.  No  material  change  has  occurred,  no  new 
conditions  have  forced  business  to  adjust  itself  to  them, 
and  consequently  no  commercial  stagnation  or  convulsion 
has  arisen. 

The  only  difference  in  the  mode  of  carrying  on  trade  be- 
fore suspension  and  after,  is  the  change  in  the  things  used 
to  represent  value.  Before  suspension,  to  a  limited  extent, 
coins  were  used    which    were    symbols    of    the    imaginary 


I04 


SOCIAL  STRUGGLES. 


money  of  account.  Where  coins  were  used  before  suspen- 
sion, paper  money  is  used  after  suspension  as  a  symbol  of 
symbolic  coins.  The  real  thing  in  the  people's  minds,  the 
imaginary  money  of  account  and  the  unit  of  value,  remains 
substantially  unchanged. 

MONEY     OF     ACCOUNT     WOULD     SURVIVE     THE    DESTRUC- 
TION  OF   ALL   OTHER   MONEY. 

Let  US  consider  how  we  would  compute  values  if,  instead 
of  being  deprived  of  metallic  money,  as  we  are  when  specie 
payments  are  suspended,  we  were  also  at  the  same  time 
stripped  of  paper  money  and  had  no  power  to  make  either 
it  or  a  substitute  therefor.  Undoubtedly,  we  should  be 
subjected  to  great  inconvenience  by  being  compelled  to  re- 
turn to  barter.  But  we  would  have  one  enormous  advan- 
tage over  primitive  man  :  we  would  still  have  left  the  imag- 
inary dollar, — the  money  of  account,  and  with  it  we  would 
continue  to  compute  values  and  reckon  accounts.  Barter 
would  be  carried  on  by  constant  allusion  to  dollars  which 
had  no  symbolic  representative,  just  as  we  now  speak  of 
mills  which  are  not  represented  by  a  concrete  form  except 
as  we  imagine  a  dollar  divided  into  a  thousand  pieces. 

A  people  deprived  of  all  material  symbols  of  value 
would  thereby  lose  to  a  considerable  extent  that  power  of 
easy  commercial  association  which  is  one  great  distinction 
between  civilized  and  barbarous  nations.  But  the  imagi- 
nary money  of  account,  under  such  circumstances,  would 
largely  obviate  the  necessity  which  otherwise  would  exist 
of  an  entire  return  to  primitive  modes  of  exchanging  prop- 
erty. 

For  the  same  reason  that  business  is  not  paralyzed  by  a 
suspension  of  specie  payments,  the  addition  to,  or  sub- 
traction from,  the  currency  of  one  kind  of  standard  money 
has  in  itself  no  tendency  to  derange  commerce.  Before 
February  12,  1873,  the  United  States  had  always  two 
kinds  of  standard  coins,  both  of  which  were  a  full  legal  ten- 
der :  viz.,  the  gold  dollar  and  the  silver  dollar.  February  25, 
1862,  a  third  kind  of  money  was   created   which   was  a  full 


SEVERAL  KINDS  OF  MONEY.  Iqc 

legal  tender  for  all  purposes  except  payment  of  custom  du- 
ties and  interest  on  the  public  debt  ;  viz.,  the  greenback. 
We  thus  had  three  kinds  of  legal  tender  immediately  after 
February  25,  1862.  A  fourth  kind  of  money  was  made  by 
the  National  Bank  Act,  June  3,  1864.  This  money  is  a 
legal  tender  for  all  debts  due  the  Government  except  cus- 
tom duties. 

By  the  demonetization  of  the  standard  silver  dollar,  the 
number  of  legal  tenders,  except  for  sums  not  over  five  dol- 
lars, was  reduced  to  tzvo,  not  counting  the  national  bank- 
notes, the  trade-dollar,  and  the  fractional  money. 

The  act  of  February  28,  1878,  restored  the  legal-tender 
quality  of  the  silver  dollar,  and  increased  the  number  of  legal- 
tender  moneys  to  three.  But  the  aforesaid  changes  in  the 
iiuuiber  of  legal  tenders  were  almost  unnoticed,  simply  be- 
cause people  were  not  accustomed  to  make  exchanges  for 
gold  dollars,  silver  dollars,  or  paper  dollars,  but  for  the 
imaginary  dollar  which  forms  the  money  of  account. 

FALSE   PREDICTIONS. 

After  the  passage  of  said  act  of  1878  several  "econo- 
mists" predicted  with  great  positiveness  and  vehemence 
that  the  business  of  the  country  would  be  in  chaos  in  a  few 
months  thereafter  as  an  inevitable  result  of  the  introduction 
of  a  new  standard  coin.  These  "  learned  "  school-masters 
seemed  to  really  believe  business  could  not  be  properly 
carried  on  with  more  than  one  legal-tender  money.  But 
their  confident  predictions  have  shared  the  fate  of  other 
statements  made  without  reference  to  actual  facts. 

As  will,  in  the  proper  place,  be  more  fully  shown,  the  only 
important  result  of  the  remonetization  of  silver  has  been 
that  prices  have  not  fallen  as  low  as  they  otherwise  would 
have  done,  thus  producing  the  reverse  of  the  tendency 
which  was  produced  by  stopping  the  coinage  of  silver. 

When  we  hereafter  come  to  study  the  causes  which  raise 
and  depress  prices,  we  shall  find  that  the  number  of  differ- 
ent legal-tender  moneys  in  circulation  has  no  effect  what- 
ever on  prices,  except   as  it  may  increase  or  diminish  the 


Io6  SOCIAL  STRUGGLES. 

gross  amount  of  legal-tender  money.  But  the  total  sum  of 
legal-tender  money  in  a  country  is  not  necessarily  changed 
by  an  alteration  in  the  number  of  the  kinds  of  legal 
tender. 

THE   WEIGHT   OF   COINS   IS   SELDOM    CONSIDERED. 

Most  of  the  writers  who  are  kind  enough  to  give  us  in- 
struction in  finance  state  that  coins  are  used  as  money,  and 
pass  current,  only  because  people  know  that  they  contain 
a  fixed  amount  of  pure  gold  and  silver,  a;id  consequently 
know  that  they  have  a  "  fixed  value."  However,  as  a  mat- 
ter of  fact  easily  demonstrated,  the  vast  majority  of  persons 
have  nothing  in  mind  but  the  money  of  account.  They  read- 
ily comprehend  prices  stated  in  the  money  of  account  be- 
cause the  value  attached  to  its  unit  has  become  impressed 
on  their  minds.  But  any  marked  deviation  from  this  familiar 
mode  of  estimating,  comparing,  and  stating  prices,  confuses 
them.  If  a  dealer  in  clothing  should  put  in  his  show 
window  a  coat  marked,  "  348  30- 1 000  grains  of  pure  gold  ;  " 
or  should  mark  a  pair  of  trousers,  "  Cheap  at  2,970  grains 
of  pure  silver  ;  "  how  many  persons  at  first  sight  would  be 
able  to  say  whether  they  thought  the  prices  fair?  Cer- 
tainly, not  one  person  in  a  hundred. 

But  if  he  marked  the  coat  "$15,"  and  the  trousers 
"  $8,"  every  one  would  understand  him.  This  would  be 
so  in  this  country  because  the  dollar  is  here  the  money  of 
account,  and  each  person  has  an  idea  of  its  meaning  ;  where- 
as his  mind  has  not  been  accustomed  to  associate  an  idea  of 
a  certain  value  in  connection  with  one  or  two  thousand,  or 
any  other  number  of  grains  of  gold  or  silver. 

If  a  shop-keeper  in  Russia  should  mark  his  goods  in  "  dol- 
lars "  he  would  thereby  convey  but  little  idea  to  his  cus- 
tomers of  the  prices  asked,  because  the  dollar  is  not  the 
Russian  money  of  account. 

Prior  to  the  Revolutionary  War,  pounds,  shillings  and 
pence  were  the  money  of  account  in  this  country.  One  of 
the  earliest  measures  of  the  United  States  Government  was 
to  establish  the  decimal  system  of  currency,  and  substitute 


INEQUALITIES  OF  PRICES.  I07 

the  dollar  for  the  pound,  as  the  unit  of  value.  But  the  es- 
tabhshed  habit  of  estimating  values,  and  reckoning  accounts 
in  pounds,  shillings  and  pence  faded  away  very  slowly. 
Many  merchants  retained  the  old  method  to  the  day  of 
their  death,  and  noticeable  traces  of  the  custom  of  reckon- 
ing values  in  shillings  remained  sixty  years  after  the  coinage 
of  dollars. 

If  the  English  Government  were  to  legally  abolish 
pounds,  shillings  and  pence,  and  commence  coining  dollars 
and  fractions  of  dollars,  instead  of  sovereigns  and  fractions 
of  sovereigns,  the  people  of  England,  with  few  exceptions, 
would  go  steadily  on  in  the  old  rut  and  continue  to  esti- 
mate, compare  and  state  all  values  by  the  pound.  The 
habit  of  using  the  pound  as  the  unit  of  value  is  so  firmly 
fixed  in  the  national  mind  that  a  century  would  probably 
pass  before  dollars  would  be  used  as  readily  as  pounds 
now  are.  This  would  be  so  because  the  current  coins  of  a 
country  are  simply  the  symbols  of  something  deeper  and 
more  potent  behind  them,  viz.,  the  imaginary  unit  of  value, 
the  established  money  of  account. 

RISE   AND   FALL   OF   PRICES. 

During  the  recent  civil  war,  especially  during  the  first  two 
years  of  that  struggle,  those  who  entertained  the  common 
belief  that  gold  had  a  fixed  value,  and  that  therefore  the 
price  of  paper  money  stated  in  gold  was  a  correct  measure 
of  the  value  of  things,  were  very  much  puzzled  by  the  fact 
that  the  price  of  real  estate  and  many  other  things  remained 
comparatively  but  little  affected,  while  rapid  and  enormous 
fluctuations  of  value  were  registered  by  the  barometer  of 
the  Gold  Exchange  room.  This  arose  from  two  causes, 
one  of  which  will  hereafter  be  stated..  The  other  cause  is 
the  fact  that  the  great  mass  of  the  people  compute  and 
state  all  values  by  the  money  of  account,  and  when,  by  long 
habit,  they  have  acquired  a  certain  idea  of  the  worth  of 
the  unit  of  value,  viz.,  the  imaginary  dollar,  they  adhere  to 
it  after  the  current  money,  or  the  legal-tender  standard 
money,  or  both  of  them,  have  undergone  a  change  in  value. 


jo8  SOCIAL  STRUGGLES. 

The  value  of  the  money  of  account  may  remain  but  little 
changed  for  a  considerable  time,  while  current  money  and 
the  legal-tender  money  have  either  increased  or  decreased 
materially  in  value. 

At  the  beginning  of  the  war,  the  first  change  in  prices 
was  observed  in  imported  goods.  The  next  change  occurred 
in  those  articles  in  active  demand  for  export  ;'  next,  personal 
property  most  frequently  bought  and  sold  rose  in  price ; 
then  all  kinds  of  personal  property  and  labor  were  quoted 
higher ;  and,  lastly,  the  price  of  real  estate  was  affected. 
Like  personal  property,  the  real  estate  deemed  most  desir- 
able, and  that  most  frequently  bought  and  sold,  rose  first  in 
price. 

If  a  shallow  dish  containing  a  pint  of  water  be  exposed  to 
either  cold  or  sunshine  for  one  hour,  its  temperature  will  be 
materially  changed.  If  a  barrel  of  water  be  similarly  exposed 
much  less  change  will  occur,  and  the  effect  will  diminish  in 
the  ratio  that  the  amount  of  water  is  increased.  Finally, 
w^e  find  that  a  large  deep  lake  or  ocean  is  affected  sensibly 
only  by  a  long  continued  exposure  to  a  considerable  de- 
gree of  heat  or  cold. 

Changes  often  take  place  in  the  value  of  current  money, 
legal-tender  money,  and  the  money  of  account  as  the  result 
of  causes  hereafter  to  be  discussed. 

If  we  liken  the  money  of  account  to  a  large  body  of  water, 
the  current  money  to  a  smaller,  and  the  legal-tender  money 
to  the  smallest  body  of  water,  we  find  that  these  causes 
operate  on  the  three  different  kinds  of  money  in  a  manner 
analogous  to  the  action  of  heat  and  cold  on  different  sized 
bodies  of  water,  and  produce  similar  results.  A  slight  tem- 
porary cause  may  affect  the  legal-tender  money,  or  the  cur- 
rent money,  without  producing  an  appreciable  effect  on  the 
money  of  account.  But  if  this  cause  be  very  powerful,  or 
long  continued,  the  money  of  account  becomes  changed  in 
consequence  of  a  change  in  the  purchasing  power  of  its  unit. 
Results  occur  in  the  same  order,  no  matter  whether  the 
change  consists  in  an  increase  or  a  decrease  in  the  worth  of 
the  imaginary  unit  of  the  money  of  account.      They  are  first 


ORDER  IN  WHICH  PRICES  CHANGE. 


109 


shown  in  the  prices  of  those  things  which  may  be  compared 
to  a  dish  of  water, — those  things  which  are  most  mercurial 
and  subject  to  the  greatest  commercial  activity ;  and  finally 
they  appear  in  the  prices  of  that  great  mass  of  wealth  which 
is  comparatively  seldom  bought  and  sold.  Real  estate  is 
the  last  in  rising  and  the  last  in  falling  in  value.  Real  es- 
tate most  in  demand,  and  most  frequently  bought  and  sold, 
rises  in  value  before  the  real  estate  which  is  seldom  trans- 
ferred. 

The  aforesaid  considerations  explain  why  it  is  that  some 
things  are  often  falling  in  price  at  the  same  time  that  the 
price  of  others  is  stationary,  or  even  rising.  They  are  also 
of  great  practical  importance  to  business  men  upon  whom 
rests  the  necessity  of  making  bargains  to  be  executed  at  a 
future  time,  as  they  may  help  to  forecast  the  prices  of 
given  things  at  such  future  date. 


CHAPTER   VII. 

Effect  of  Legislation  on  Value.— What  Legislation  is. — Power  of  Legis- 
lation is  Limited. — The  Laws  of  Trade. — An  Absurd  Question. — 
Inconsistency  of  those  who  Deny  that  Legislation  can  Create  Value, 
— Historical  Example  of  the  Creation  of  Value  by  Legislation. — Evi- 
dences that  a  Thing  is  Valuable.  —Value  of  a  Man's  Services. — Leg- 
islation may  change  the  Value  of  a  Person's  Services. — Historical 
Legislation  which  affected  Values. — Effect  of  Aforesaid  Law. — What 
made  the  Aforesaid  Law  Possible. — A  Plea  in  Defense  of  the 
Money-Lenders. — Effect  of  Other  Legislation  on  Paper  Money. — 
Bankers'  Schemes. — National  Bank  Act. — Subterfuges. — Why  Na- 
tional Bank-Notes  have  not  been  Destroyed. — Attacks  on  the  Green- 
backs.— The  Five-twenty  Bonds. — Difficulty  of  Satisfying  Avarice. — 
A  Hypocritical  "Pretense. — Proclivity  of  Mankind  to  Hypocrisy. — 
Means  Employed  to  perpetrate  a  Crime. —  Why  Horatio  Seymour 
was  Defeated. — National  Credit. — What  Experience  Teaches. — 
Effect  of  Act  of  March  l8,  1869. — Other  Acts  of  Repudiation  and 
Di.sgrace. — What  made  the  Aforesaid  Wrongs  Possible. — Fruits  of 
Crime  and  Folly. — Views  of  so-called  Statesmen. — Simple  Facts 
Overthrow  false  Theories. 

Igiwj-ancc  of  tJic  nature  of  value  is  tlie  parent  of  the  suppo- 
sition that  legislation  has  no  effect  upon  it. 

Perhaps  there  is  no  doctrine  which  writers  on  political 
economy  more  unanimously  agree  to  assume  as  a  funda- 
mental truth  than  the  statements  that  "  value  cannot  be 
created  by  legislation,"  and  that  "  legislation  is  powerless 
to  create,  to  increase,  or  to  diminish  value."  From  this 
doctrine  an  important  practical  result  naturally  and  neces- 
sarily flows;  viz.,  the  idea  that  the  value  of  money  can 
neither  be  created,  increased,  or  diminished  by  legislation. 

The  examination  heretofore  given  this  subject  has  forced 
us  to  the  conclusion  that  value  is  human  judgment  of  the 
comparative  worth,  utility,  or  desirability  of  a  thing,  or  of 
its  ownership  and  possession ;  and  that  this  judgment  is 
formed  and  depends  on  the  relation  of  that  thing  to  man- 
no 


LEGISLA  TION  IS  A  KIND  OF  LABOR.  i  j  i 

kind  and  to  other  things.  In  other  words,  value  is  created, 
increased  and  diminished  by  circumstances  and  conditions. 
Therefore  whether  legislation  can  create  value  or  not  de- 
pends entirely  on  the  answer  to  other  questions;  viz..  Can 
legislation  create  conditions,  facts  and  circumstances  ?  Can 
legislation  change  the  relation  of  a  thing  to  mankind,  and 
the  relation  of  one  thing  to  other  things?  Can  legislation 
cause  a  diminished  or  an  increased  use  of  a  thing,  and 
thereby  diminish  or  increase  the  demand  for  it  ? 

WHAT   LEGISLATION    IS. 

Before  we  can  answer  the  aforesaid  questions  we  must  in- 
quire what  legislation  is.  In  doing  this  our  attention  is  first 
attracted  by  the  fact  that  legislation  is  not  manual  labor. 
But  this  is  not  a  decisive  test,  from  the  fact  that  a  consider- 
able portion  of  what  the  world  regards  as  its  most  valuable 
things  are  chiefly  the  result  of  mental  labor. 

Legislation  is  the  mental  labor  of  a  considerable  number 
of  men.  In  performing  this  labor,  legislators  have  the  ben- 
efit of  the  history  of  the  practical  results  of  the  mental 
labors  of  generation  after  generation  of  other  legislators. 
So  that  in  theory,  and  largely  in  fact,  legislation  is  the  re- 
sult of  an  accumulation  of  the  labors  of  bygone  legislators, 
combined  with  the  labors  of  living  law-makers. 

Legislation  not  only  represents  the  labors  of  a  great  num- 
ber of  legislators  who  have  lived  at  different  times,  but  it 
also  represents  the  thoughts  and  experience  of  all  mankind 
in  regard  to  laws  which  have  been  enacted,  and  subjected  to 
practical  tests. 

What  is  legislation  an  attempt  to  do?  It  is  simply  an 
effort  to  organize  the  forces  of  society  in  such  a  manner  that 
certain  modes  and  forms  of  thought  and  action  will  be  en- 
couraged, and  other  forms  of  thought  and  action  \\'ill  be  dis- 
couraged. Legislators,  with  more  or  less  practical  success, 
endeavor  to  organize  the  social  forces  against  things  which 
they  regard  as  of  evil  tendency.  Legislation,  therefore,  is 
an  organization  of  society  for  the  purpose  of  creating  cer- 
tain conditions  which  legislators  deem  desirable  and  salu- 


112  SOCIAL  STRUGGLES. 

tary,  and  this  organization  can  only  be  effected  by  the  con- 
sent and  co-operation  of  the  ruling  class  in  society.  The 
rule  and  domination  of  this  class  may  arise  either  from 
their  superior  numbers,  from  their  superior  intelligence  and 
power,  or  from  both  causes  combined.  But  legislation 
always  implies  some  degree  of  control  over  the  forces  of 
society,  else  the  Legislature  would  not  exist. 

We  are  forced  to  admit  that  the  labor  of  a  single  indi- 
vidual can  create  conditions,  and  thereby  create  value.  It  is 
also  apparent  that  a  few  men  may  combine  together,  may 
organize  a  company,  and  by  this  means  create  a  condition 
which  will  create  value. 

Suppose  a  hundred  industrious  and  thrifty  families  form 
an  association,  and  buy  ten  thousand  acres  of  wild  land. 
This  land  is  fertile,  well  supplied  with  water  and  timber, 
and  has  on  it  coal  which  can  be  mined  with  a  moderate 
amount  of  labor;  but,  in  consequence  of  a  lack  of  popula- 
tion in  its  neighborhood,  the  value  of  the  land  is  estimated 
at  only  two  dollars  per  acre.  As  soon,  however,  as  this  col- 
ony of  emigrants  have  perfected  their  title,  the  land  is  en- 
hanced in  value.  A  .still  greater  rise  in  its  value  occurs  as 
soon  as  the  hundred  families  have  arrived  on  the  spot  and 
staked  out  their  respective  portions  of  the  land.  This 
is  simply  because  the  land  is  thereby  placed  under  different 
conditions  from  what  it  was  before. 

If  the  organization  of  a  sviall  portion  of  a  nation  can  cre- 
ate conditions  and  value,  it  is  certain  that  the  organization 
of  the  ivhole  nation  for  a  definite  purpose  can  also  create 
conditions  and  value.  Legislation  is  a  mode  of  organizing 
the  people  who  are  subject  to  the  laws  enacted.  By  the 
labors  of  a  legislature  the  thoughts  and  conduct  of  a  whole 
nation  are  placed  under  new  conditions.  As  an  inevitable 
consequence,  the  national  efforts  produce  different  results 
from  what  they  would  if  those  new  conditions  had  not  been 
created  by  law.  Legislation,  therefore,  either  for  good  or 
for  evil,  is  the  most  potent  of  all  social  forces.  This  is  nec- 
essarily so,  because  legislation  is  the  expression  of  the  senti- 
ments of  the  dominant  class  of  society.     Legislation  is  one 


HUMAN  CAPABILITIES  ARE  LIMITED. 


113 


of  the  great  educators  of  the  people  ;  it  organizes  and  com- 
bines a  considerable  number  of  human  tendencies  and  de- 
sires, and  thereby  converts  them  into  auxiliaries  of  statute 
law. 

POWER   OF    LEGISLATION   IS    LIMITED. 

It  is  undeniably  true  that  legislation  is  not  omnipotent. 
Like  all  other  human  agencies  its  powers  are  limited,  but 
this  does  not  show  that  it  has  no  power  at  all.  No  one 
claims  that  legislation  can  either  subvert  or  create  a  natural 
law.  Legislation  exerts  influence,  not  by  opposing  natural 
laws,  but  by  creating  new  conditions  under  which  latent 
forces  come  into  play,  and  by  which  natural  laws  operate  in 
different  ways,  because  they  are  giving  direction  to  differ- 
ent forces.  When  a  farmer  plows  a  field,  he  does  not 
subvert  existing,  nor  create  new  natural  laws.  He  simply 
changes  the  conditions  under  which  the  sun,  rain,  air  and 
kindred  forces  will  have  an  effect  on  the  earth.  He 
changes  the  relation  of  things ;  he  changes  the  conditions 
under  which  natural  laws  shall  work.  Legislation  influences 
society  just  as  a  farnic}'  does  his  fields  :  it  creates  nciv  condi- 
tions under  which  social  laivs  and  forces  luork  ont  different 
results. 

THE   LAWS   OF   TRADE. 

We  are  frequently  told  that  "  legislation  has  nothing 
whatever  to  do  with  finance  ;  "  that  all  such  thingrs  are 
governed  by  the  "  laws  of  trade."  Many  credit  this  state- 
ment, and  anarchists  give  credence  to  the  kindred  assertion 
that  "  legislation  has  little  or  no  influence  on  anything," 
except  for  evil ;  that  the  best  way  would  be  to  "  abolish  all 
laws  and  let  everything  take  its  natural  course."  Recently, 
an  event  occurred  in  the  streets  of  this  city  which  demon- 
strated in  a  striking  manner  the  folly  of  such  doctrines.  A 
street  parade  of  colored  men  took  place.  Before  them 
marched  a  platoon  of  white  policemen,  and  in  the  proces- 
sion were  four  bands  of  music,  three  of  which  were  entirelv 
composed  of  white  men.     Such  a  thing  would  have  been 


jj.  SOCIAL  STRUGGLES. 

impossible  thirty  years  ago.  The  poHcemen  would  then 
have  refused  to  march,  and  the  musicians  would  have  re- 
fused to  play  in  company  with  "  niggers."  We  should 
then  have  heard  the  old  story  that  it  was  "  contrary  to  nat- 
ural law  for  blacks  and  whites  to  associate  except  in  the  re- 
lation of  slaves  and  masters."  But  law  has  converted  these 
once  despised  black  men  into  citizens,  with  the  right  to 
vote  and  hold  office.  The  possibility  of  the  aforesaid  event 
has  been  largely  wrought  by  changes  in  legislation,  which 
have  produced  changes  in  public  sentiment.  What  are 
called  the  "  laws  of  trade  "  are  merely  the  phenomena  ex- 
hibited by  human  society  under  existing  conditions,  and 
one  of  the  most  potent  of  these  conditions  is  the  legislation 
then,  and  for  some  time  previously,  in  force.  Change  the 
legislation  and  the  so- e ailed  "  lazvs  of  trade  "  also  change  to  a 
greater  or  less  extent. 

AN  ABSURD  QUESTION. 

Many  of  those  who  hold  that  legislation  has  no  influence 
on  values  appear  to  imagine  all  opposition  to  their  favorite 
dogma  crushed  by  asking  one  question :  "  If  value  and 
money  can  be  created  by  legislation,  why  not  create  an  un- 
limited amount  of  them  in  that  way  and  no  longer  levy 
taxes  for  the  support  of  the  Government  ?  " 

This  absurd  question  would  deserve  no  serious  answer 
were  it  not  for  the  fact  that  many  persons  in  high  positions 
think  it  a  conclusive  argument.  The  solitary  judge  of  the 
United  States  Supreme  Court  who  differed  from  the  rest 
of  his  associates  on  the  question  of  the  constitutional  power 
of  Congress  to  issue  legal-tender  paper  money  in  time  of 
peace,  seems  to  have  based  his  opinion  on  the  idea  that 
the  aforesaid  inquiry  conclusively  settled  the  matter. 

This  question  reminds  us  of  the  story  of  a  man  who  did 
his  cooking  by  an  open  fire-place.  When  told  that  half  his 
fuel  could  be  saved  by  using  a  cook-stove,  he  replied  that 
such  a  statement  must  be  false ;  because,  if  half  the  fuel 
could  be  saved  with  one  stove,  two  stoves  would  enable  him 
to  save  it  all  and  cook  without  any  fuel  whatever. 


FOOLISH  QUESTIONS.  I  j  5 

A  number  of  kindred  questions  could  be  asked,  each  one 
as  absurcf  as  tlie  one  aioresafd.  For  example,  we  might  in- 
quire :  If  a  good  farmer  can  raise  twenty  bushels  of  grain 
on  an  acre  where  only  five  bushels  once  grew,  why  cannot 
a  still  better  farmer  raise  eighty  bushels  of  grain  on  the 
same  land  ?  If  labor  create  value,  why  not  create  an  un- 
limited amount  of  value  by  labor,  and  cease  our  continual 
struggle  to  supply  our  wants?  If  elegant  houses  can  be 
created  by  labor,  what  is  the  use  of  living  in  poor,  homely 
houses ;  why  not  build  fine  houses  enough  to  supply  the 
whole  community  with  them  ? 

HUMAN  CAPACITY  IS  LIMITED. 

All  necessity  for  asking  the  foregoing  questions  and  a 
thousand  similar  ones  is  obviated  by  the  exercise  of  a  little 
reflection  and  common  sense.  Value  is  created  by  labor, 
but  this  undoubted  fact  does  not  warrant  us  in  presuming 
that  there  are  no  limits  to  the  power  of  labor  to  create  value. 
Human  capacities  in  every  direction  are  hedged  in  with  lim- 
itations. Bounds  are  appointed  that  we  cannot  pass.  The 
production  of  land,  and  kindred  results  in  various  other  de- 
partments of  industry,  can  be  increased,  but  we  soon  reach 
the  extent  to  which  this  increase  can  be  carried.  All  agree 
that  the  various  necessaries  of  life  and  forms  of  wealth  can 
be  created  by  labor,  but  after  toiling  for  thousands  of  years 
mankind  are  now  but  a  short  remove  from  starvation,  and 
millions  of  persons  are  constantly  in  a  state  of  poverty. 

Our  control  over  natural  forces  is  steadily  growing,  and 
we  can  now  produce  conditions  which  create  wealth  more 
easily  than  ever  before.  But  man's  power  to  create  value 
is  still  so  limited  that  if  all  the  wealth  in  the  world  were 
equally  divided,  each  man  would  have  much  less  than  what 
is  generally  thought  requisite  for  a  competence. 

Legislation  can  create  conditions  and  thus  create  value; 
but  this  power,  like  all  other  human  capabilities,  is  confined 
within  strict  and  narrow  limits.  Legislation  can  place 
pieces  of  paper  under  certain  conditions  and  thus  create 
money  ;  but  it  by  no  means  follows  that  therefore  legislation 


Il6  SOCIAL  STRUGGLES. 

can  create  an  unlimited  amount  of  money.  Because  a  miner, 
under  some  circumstances,  may  be  able  to  dig  one  ounce  of 
gold  in  three  days,  it  by  no  means  follows  that  three  hun- 
dred men  could  dig  one  hundred  ounces  every  day,  and  in- 
definitely continue  to  do  so.* 

On  the  other  hand,  because  the  capacity  of  a  single  labor- 
er, and  the  powers  of  a  number  of  laborers  sitting  as  a  legis- 
lature, to  create  conditions  and  thus  create  value  are  limited 
by  narrow  and  impassable  boundaries,  it  does  not  therefore 
follow  that  this  capacity  has  no  existence.  We  might  as 
well  argue  that  because  a  man's  powers  in  all  other  respects 
are  limited  that  therefore  he  does  not  actually  possess  any 
powers  whatever.  For  instance,  we  know  that  a  man  can- 
not walk  fifteen  miles  in  an  hour;  but  this  does  not  prove 
tliat  he  may  not  walk  two  or  three  miles  in  an  hour. 

INCONSISTENCY   OF   THOSE  WHO   DENY  THAT   LEGISLATION 
CAN  CREATE  VALUE. 

There  is  one  curious  fact  in  regard  to  the  doctrine  that 
legislation  cannot  create  value.  Many  persons  assume  that, 
nothing  depends  on  legislation,  but  that  "  natural  laws  "  are 
the  sole  causes  which  produce  results.  But  suppose  it  is 
said  :  "  Since  laws  have  no  influence,  let  us  repeal  all  exist- 
ing laws,  and  among  other  things  let  us  withdraw  legal  sup- 
port to  the  value  of  gold,  and  legal  power  to  collect  debt," 

Immediately  a  violent  objection  is  made  to  the  destruc- 
tion of  what  a  moment  before  was  pronounced  of  no  influ- 
ence. But  if  law  have  no  effect,  why  should  persons  who  so 
believe  object  to  the  repeal  of  laws  ? 

This  inconsistency  is  chiefly  due  to  two  causes:  First. 
Profound  ignorance  of  the  nature  of  value  and  the  causes 
which  produce  it.  Second.  Personal  contentment  and  sat- 
isfaction with  the  results  which  long-existing  laws  have 
helped  to  produce.  The  few  men  who  own  most  of  the  land 
in   England  are  quite  satisfied  with   the  laws  which  uphold 

*  If  that  were  the  case,  and  the  product  of  gold  mines  could  be  increased 
by  human  labor  and  ingenuity  proportionately  to  all  other  products,  gold 
would  maintain  a  more  uniform  value  than  it  now  does. 


I 


THE  FRACTIONAL  PAPER  MONEY. 


117 


their  title  to  it.  All  over  the  world,  the  great  majority  of 
those  whom  the  present  order  of  things  has  placed  in  opu- 
lent circumstances  are  averse  to  change.  "  So  long  as  we 
are  comfortably  situated  why  hazard  the  result  of  a  change  ?  " 
Those  in  favor  of  the  "  let  alone  "  doctrine  are  chiefly  those 
who  now  possess  more  than  their  equitable  share  of  the 
world's  wealth.  They  do  not  wish  any  inquiry  made  into 
the  rightfulness  of  the  means  whereby  their  possessions 
were  acquired,  for  fear  that  such  an  examination  might  re- 
sult in  laws  which  would  diminish  their  wealth.  Hence,  in 
every  country  and  age  a  majority  of  the  wealthy  classes 
have  always  instinctively  resisted  every  movement,  the  di- 
rect or  indirect  object  of  which  was  to  impartially  ascertain 
and  make  public  the  justice  of  existing  laws. 

HISTORICAL    EXAMPLE    OF   THE     CREATION    OF    VALUE    BY 
LEGISLATION. 

The  power  of  a  legislature  to  create  value,  and  the  limita- 
tion of  that  power,  are  both  exemplified  by  the  act  passed 
by  Congress,  March  3,  1863.  Prior  to  that  time,  silver  coins 
had  disappeared  from  circulation,  and  a  want  of  fractional 
money  existed.  That  act  authorized  the  issue  of  fifty  mill- 
ions of  paper  money,  in  form  of  fractions  of  a  dollar,  and 
allowed  the  holders  of  those  fractions  to  return  them  to  the 
Treasury  and  receive  dollars  therefor  whenever  they  chose 
to  do  so. 

Said  act  placed  pieces  of  paper,  which  previously  were 
worth  only  a  few  cents  per  pound,  under  conditions  which 
enabled  them  to  supply  a  want,  viz.,  the  need  of  fractional 
money.  The  result  was  that  a  large  value  was  conferred 
on  those  pieces  of  paper.  The  extent  to  which  this  value 
could  be  conferred  was  shown  by  the  extent  to  which  a  de- 
mand for  such  fractional  money  existed.  Although  fifty 
million  dollars  were  legalized,  that  amount  was  never  issued  ; 
the  demand  proved  to  be  for  about  forty-five  millions,  by 
the  fact  that  all  issues  above  that  sum  were  promptly  re- 
turned to  the  Treasury  as  not  needed. 

If  the  fractional  paper  money  had  not  been  convertible 


Il8  SOCIAL  STRUGGLES. 

into  greenbacks,  it  would  have  fallen  below  the  value  of 
greenbacks  whenever  more  than  the  amount  actually  needed 
by  the  people  was  issued.  As  water  never  rises  higher  than 
the  dam  which  retains  it,  the  value  of  the  fractional  money 
kept  constantly  on  a  level  with  the  value  of  the  greenback. 
As  it  was,  whenever  there  was  a  surplus  of  fractional  paper 
money,  the  excess  ran  over  the  dam  and  was  changed  into 
whole  dollars. 

Under  the  delusion  that  this  fractional  paper  money  had 
no  value  beyond  its  worth  for  paper  rags,  the  Government 
largely  increased  the  interest-bearing  public  debt  for  the 
purpose  of  buying  silver  bullion.  The  fractional  paper 
money  was  destroyed,  and  replaced  by  silver  coins,  which  it 
was  imagined  would  perform  functions  that  the  fractional 
paper  money  had  failed  to  execute.  The  country  was  per- 
suaded by  so-called  "  financiers  "  that  if  the  people  only 
had  silver  coins  they  would  have  a  "  measure  of  value,"  and 
then  it  would  be  easy  to  go  out  shopping  and  always  get 
the  exact  amount  of  value  that  was  parted  with. 

But  experience  has  demonstrated  that  the  silver  coins  are 
no  more  valuable  to  the  community  than  the  fractional  paper 
money  was.  This  is  so,  simply  because  the  coins  fill  the 
same  office  that  was  previously  filled  by  the  paper  money. 
The  coins  are  exchangeable  for  greenbacks,  and  the  paper 
fractions  were  also  exchangeable  for  greenbacks.  As  a  thing 
is  worth  what  it  can  be  equally  exchanged  for,  it  follows 
that  the  worth  of  a  greenback  determines  the  value  of  the 
thing  given  for  a  greenback.  The  silver  coins  are  now  worth 
as  much  as  gold  for  the  same  reason  that  the  greenback  is. 
If  the  fractional  paper  money  had  not  been  destroyed,  it 
would  also  have  been  worth  the  same  as  gold. 

Since  experience  has  shown  that  the  denunciations  of  the 
fractional  paper  money  were  not  founded  in  reason,  but  on 
crude  theories  and  ignorant  prejudice,  the  Government  could 
do  no  more  popular  act  than  to  issue  twenty-five  millions 
of  paper  dollars  in  form  of  one-half  and  one-quarter  dollar 
notes. 


HOW  WE  A'lVOW  A    THING  IS  VALUABLE. 


EVIDENCES   THAT   A   THING   IS   VALUABLE. 


119 


It  Ivas  been  said  that  "  the  fractional  paper  money  had  an 
exchangeable  value,  but  no  real  intrinsic  value."  This  state- 
ment illustrates  the  popular  confusion  in  regard  to  the  nature 
of  value  and  how  it  is  created  and  constituted. 

Whatever  is  exchangeable  equally  for  things  which  all 
concede  have  a  "  real  value  "  is  itself  possessed  of  a  "  real 
value  ;  "  else  why  should  persons  give  valuable  things  in  ex- 
change for  it  ?  Whatever  supplies  a  want  and  performs  a 
duty  or  function  is  just  as  valuable,  for  that  purpose,  as  it 
would  be  if  made  of  different  and  more  costly  materials.  A 
brass  baggage  check  is  just  as  valuable,  as  a  baggage  check, 
as  it  would  be  if  made  of  silver.  It  is  true  that  the  silver 
check  would  be  more  valuable  than  the  brass  check  for  melt- 
ing and  using  for  some  other  purpose.  But  this  fact  does  not 
affect  its  value  as  a  baggage  check.  Fractional  paper  money 
was  valuable  because  it  supplied  the  need  of  a  medium  of 
exchange.  As  it  performed  a  valuable  service,  it  had  pre- 
cisely the  same  value  for  that  purpose  as  the  silver  coins 
which  now  perform  the  same  service. 

Fractional  paper  money  is  far  more  convenient  to  use  than 
silver  coins.  The  objection  to  it  on  the  ground  that  dirty 
bills  were  sometimes  in  circulation  could  be  obviated  by  mak- 
ing all  the  principal  post-of^ces  agencies  for  exchanging 
new  for  worn  bills. 

All  difficulty  of  seeing  clearly  why  the  fractional  paper 
money  was  just  as  valuable  as  silver  coins  disappears  when- 
ever the  nature  of  value  is  properly  considered. 

Tivo  different  materials  have  the  same  value  so  long  as  they 
are  under  the  sajne  conditions,  supply  the  same  zuant,  and  per- 
form the  same  duty. 

Mahogany  is  a  valuable  timber  for  conversion  into  furni- 
ture ;  but  if  used  for  piles  driven  into  the  mud  to  rest  build- 
ings on  it  is  no  more  valuable  than  yellow  pine.  A  rose- 
wood scavenger  cart  would  be  no  more  valuable  than  a  cart 
made  of  less  valuable  timber.  The  value  of  a  plow  depends 
on  its  ease  of  draft  and  the  thoroughness  with  which  it  per- 


I20 


SOCIAL  STRUGGLES. 


forms  its  work.  Its  value  as  a  plow  would  not  be  increased 
by  trimnning  it  with  gold  or  silver.  The  value  of  a  thing  for 
a  particular  purpose  does  not  depend  solely  on  its  value  for 
other  purposes.  Thus  gold  is  far  more  valuable  than  steel 
for  filling  decayed  teeth  ;  but  for  the  spring  of  a  chronome- 
ter watch,  steel  is  more  valuable  than  gold.  Copper  is  worth 
more  per  pound  than  iron  and  steel,  but  many  valuable  iron 
and  steel  tools  would  be  worthless  for  their  special  purpose 
if  made  of  copper. 

The  value  of  a  tool  of  any  kind  does  not  depend  on  its 
materials,  size,  form,  color  or  any  other  quality  but  one  ;  viz., 
fitness  to  perform  the  work  to  be  done  with  it.  When  a  tool 
meets  the  conditions  required  it  supplies  a  want,  and  its 
value  for  that  purpose  depends  solely  on  the  completeness 
with  which  the  existing  conditions  are  filled  by  its  use. 

VALUE   OF   A   man's   SERVICES. 

What  is  true  of  things  is  also  true  of  persons.  A  man's 
value  to  society  depends  on  his  fitness  for  the  peculiar 
duties  he  performs,  and  not  on  the  fact  that  it  would  be 
possible  for  him  to  perform  more  important  and  valuable 
labor.  Neither  Bismarck  nor  Gladstone  would  be  of  any 
more  value  to  their  respective  countries  than  ordinary  coal 
heavers,  if  they  did  nothing  but  shovel  coal.  No  matter 
what  office  a  man  has  latent  capacity  to  honorably  occupy, 
his  value  to  society  is  measured  by  the  duties  he  actually 
performs.  When  his  abilities  are  discovered,  and  his  po- 
sition correspondingly  changed,  then  his  importance  to  his 
fellows  and  the  value  of  his  services  are  proportionately  in- 
creased. This  recognition  of  a  particular  person's  value  to 
the  community  for  some  special  purpose  or  duty  may  not 
occur  until  a  late  period  of  his  life,  and  in  a  vast  number  of 
cases  it  never  occurs.  Such  events  are  a  loss  to  society — 
the  relation  between  the  individual  and  others  is  not  the  cor- 
rect one.  The  proper  conditions  never  occur,  and  a  large 
amount  of  valuable  ability  is  wasted.  Meanwhile  some  infe- 
rior and  incompetent  person  is  placed  in  a  situation  where  his 
services   are  comparatively   useless   because   of   inability  to 


EFFECT  OF  LA  TV  ON  PERSONAL  SEE  VICES.  \  2  I 

properly  discharge  his  duties.  Such  spectacles  are  continu- 
ally before  us,  and  show  that  the  value  of  personal  services, 
like  the  value  of  other  things,  is  determined  by  the  circum- 
stances and  conditions  under  which  those  services  are  placed, 
Circumstances  may  enhance  the  value  of  a  man's  services  or 
they  may  diminish  or  destroy  their  value. 

LEGISLATION    MAY   CHANGE     THE    VALUE     OF    A     PERSON'S 

SERVICES. 

Legislation  enhances  the  value  of  men's  services  to  society 
when  procedures  are  framed  into  statutes  which  tend  to  fill 
offices  and  positions  with  those  best  adapted  for  them.  An 
example  of  this  is  seen  in  the  laws  of  nations,  which  are 
made  with  special  reference  to  filling  special  places  with 
men  of  special  ability  for  those  places. 

When  a  system  of  laws  is  enacted  which  tends  to  place  in- 
competent men  in  office,  the  value  of  a  considerable  num- 
ber of  persons'  services  is  diminished  to  society.  There  is 
then  more  probability  that  those  in  public  service  will  not 
each  be  placed  under  the  most  favorable  conditions  to  de- 
velop his  full  value  to  the  community.  More  men  will  be 
in  either  too  high  or  too  low  places  than  under  better  laws. 

Legislation  may  also  indirectly  enhance  the  value  of  the 
services  to  society  of  certain  persons  by  putting  in  opera- 
tion means  for  their  education.  The  Military  Academy  at 
West  Point  is  an  illustration  of  this.  Boys  are  trained  to 
perform  special  duties.  This  knowledge  confers  a  special 
value  on  their  services  to  the  nation  when  they  become  men. 
Without  the  sanction  and  support  of  law,  West  Point  would 
never  have  existed. 

HISTORICAL   LEGISLATION   WHICH   AFFECTED   VALUES. 

Since  July  17,  1861,  the  United  States  Government  has 
made  several  financial  experiments  on  a  large  scale  which 
illustrate  the  effect  of  legislation  on  the  value  of  mone}-. 
By  acts  of  July  17  and  August  5,  1861,  and  February  12, 
1862,  Congress  authorized  the  issue  of  sixty  millions  of  Treas- 
ury notes.     As  first  issued  these  notes  were  not  a  legal  ten- 


122  SOCIAL  STRUGGLES. 

der,  except  for  Government  dues.  But  as  they  could  be 
used  in  making  all  payments  to  the  Government,  they  went 
into  general  circulation,  by  common  consent,  as  a  medium  of 
exchange.  By  act  of  March  17,  1862,  these  notes  were 
made  a  legal  tender  for  all  purposes  except  payment  of  in- 
terest on  the  national  debt. 

This  sixty  millions  of  dollars  were  received  by  the  Govern- 
ment for  all  purposes  at  par  with  coin.  The  result  was  that 
while  other  kinds  of  paper  money  were  quoted  below  the 
par  of  coin,  these  notes,  throughout  the  entire  period  of 
their  existence,  remained  at  the  same  value  as  coin.  This 
arose  from  the  fact  that  the  pieces  of  comparatively  worth- 
less paper  which  composed  them  were  placed  under  condi- 
tions similar  to  the  conditions  surrounding  coin.  Their 
amount  was  limited,  and  they  were  legal  tender  for  nearly 
all  purposes. 

Having  thus  seen  the  results  which  certain  conditions 
produced  on  one  kind  of  paper  money,  let  us  consider  the 
history  of  an  issue  of  paper  money  which  was  legally  placed 
under  conditions  widely  different  from  the  sixty  millions 
aforesaid. 

Toward  the  close  of  December,  1861,  specie  payments 
were  suspended.  Bank-notes,  nominally  convertible  into 
coin,  on  demand,  shared  the  fate  which  invariably  occurs 
whenever  national  distress  causes  a  serious  attempt  to  ex- 
change such  notes  for  coin.  The  "  honest  money  "  did  as 
history  tells  us  it  has  always  done  under  similar  circum- 
stances ;  it  failed.  In  the  beginning  of  1862,  after  a  long 
debate.  Congress  came  to  the  conclusion  that  national  bank- 
ruptcy was  impending,  and  that  it  would  be  impossible  to 
carry  on  the  war  under  the  existing  system  of  finance.  On 
February  25,  1862,  the  famous  Legal  Tender  Act  was 
passed.  That  act  authorized  the  issue  of  one  hundred  and 
fifty  millions  of  the  paper  money,  since  known  as  green- 
backs, and  also  authorized  the  issue  of  five  hundred  millions 
of  the,  so-called,  five-twenty  Government  bonds. 

As  the  legal-tender  act  first  passed  the  House  of  Repre- 
sentatives, the  greenbacks  were  a  full  legal  tender  for  all 


THE  CREATION  OF  GREENBACKS. 


123 


purposes  whatsoever.  This  action  profoundly  aroused  and 
alarmed  the  majority  of  the  great  money-lenders.  A  large 
lobby,  composed  of  representatives  of  many  rich  individuals 
and  corporations,  then  appeared  before  the  finance  com- 
mittee of  the  Senate,  and  threatened  that  most  of  the  capi- 
talists and  leading  financial  institutions  of  the  country 
would  refuse  to  aid  the  Government  with  money  to  carry  on 
the  war ;— would  refuse  to  buy  the  Government  bonds,  un- 
less the  greenbacks  were  shorn  of  the  legal  capacity  of  pay- 
ing the  interest  on  the  bonds.  Payment  of  the  interest  of 
the  public  debt  in  coin  entailed  some  provision  whereby 
the  Government  could  obtain  coin  for  that  purpose.  After 
some  consideration,  the  lobby  decided  to  insist  that  the 
custom,  duties  should  be  specially  mortgaged  for  the  pur- 
pose of  obtaining  the  requisite  coin  to  pay  the  interest  on 
the  national  debt.  Thus  the  demands  of  the  lobby  con- 
cluded by  requiring  that  the  greenbacks  should  be  placed 
under  adverse  and  discredited  conditions  in  two  important 
respects,  instead  of  the  one  first  suggested.  One  false  step 
necessitated  another. 

A  conference  committee  was  appointed  by  the  Senate 
and  the  House.  The  majority  of  the  members  of  that 
committee  were  alarmed  by  the  arguments  and  threats  of 
the  bankers  and  capitalists.  Most  of  them  had  no  clear 
and  definite  conception  of  financial  principles,  and  shared 
the  common  delusion  that  the  financial  wishes  and  demands 
of  bankers  were  presumptively  both  expedient  and  just. 
Therefore  this  committee  voted  to  recommend  that  the 
interest  on  the  bonds  should  be  paid  in  coin,  and  they  also 
agreed  that  the  Government  should  refuse  to  receive  its 
own  notes  at  the  Custom  House.  Thaddeus  Stevens,  the 
Republican  leader  of  the  House,  was  a  member  of  that 
committee  and  foresaw  t'he  evil  which  would  inevitably  be 
inflicted  on  the  nation  by  such  legislation.  As  a  means  of 
calling  attention  to  its  want  of  equity,  he  made  an  effort 
to  have  the  soldiers  fare  the  same  as  the  bondholders,  so 
far  as  a  payment  of  the  soldier's  wages  in  coin  would  equal- 
ize the  war  burdens  borne  by  those  who   fought  and   those 


124 


SOCIAL  STRUGGLES. 


who  remained  safely  at  home  and  loaned  money  at  high 
rates  of  interest. 

But  the  lobby  dictated  that  the  soldier  should  be  paid  in 
paper  money  which  was  dishonored  by  its  maker,  and  pro- 
claimed as  not  good  enough  to  pay  the  interest  due  the 
bondholders. 

On  the  national  statute  books  it  was  virtually  written  : 
"  The  rights  of  men  who  peril  and  give  their  health  and 
lives  in  defense  of  the  country  are  secondary  to  the  rights 
of  those  who  lend  the  Government  money.  Capital  is  more 
sacred  than  human  life.  The  Nation  has  a  right  to  con- 
script and  compel  men  who  are  not  rich  enough  to  hire  sub- 
stitutes, to  suffer  the  privations,  disease  and  death  of  the 
camp,  the  march  and  the  battle  field  ;  but  there  is  no  right, 
by  any  means  whatsoever,  to  compel  a  man  to  lend  money 
for  the  support  of  the  laws  which  protect  his  property. 
Pensions  for  injuries  received  in  the  field  can  be  justly  paid 
with  money  which  is  not  fit  to  pay  interest  with." 

Every  greenback  daily  tells  the  story  of  this  outrage  on 
humanity.  On  its  back  is  inscribed  :  "  This  note  is  a  legal 
tender  at  its  face  value  for  all  d&his,  public  and  private,  ex- 
cept duties  on  customs  and  interest  on  the  public  debt!' 

This  policy  discredited  the  greenback — deprived  it  of  two 
functions  which  it  ought  to  have  filled,  and  by  increasing 
the  demand  for  coin  increased  the  value  of  coin,  and  thus 
put  it  in  the  power  of  foreign  capitalists  to  obtain  possession 
of  our  bonds  for  less  value  than  they  otherwise  would  have 
been  obliged  to  pay  for  them.  The  action  aforesaid  of  the 
lobby  placed  a  sickle  in  the  hands  of  bankers  and  foreigners, 
who  reaped  a  rich  harvest  by  dealing  in  United  States 
bonds. 

The  mistake    and  the  wrong    of     this  measure  was   not 
merely  in  refusing  to  pay  the  soldiers  in  coin.     All  persons 
should  have   good   money.     The  evil  lay  in  issuing  money 
crippled  with  conditions  which  diminished  its  uses,  and  con 
sequently  diminished  its  value. 

It  has  been  said  that  the  depreciation  of  the  greenbacks 
was  due  solely  to  the  issue  of  so  large  an  amount  of  them. 


WHAT  DEPRECIATED  THE  GREENBACKS. 


125 


The  first  greenback  was  issued  March  10,  1862.  Before 
that  time  coin  had  risen  to  104^  per  cent.  This  shows 
that  the  greenbacks  were  depreciated  before  a  single  one  of 
them  was  printed.  Had  the  greenback  been  made  a  full 
legal  tender,  there  is  no  reason  to  suppose  that  the  premium 
on  coin,  even  in  the  darkest  days  of  the  war,  would  have 
exceeded  ten  per  cent.  As  it  was,  this  premium  went  so 
high  that  coin  was  quoted  at  one  time  at  285.  On  that 
same  day,  the  first  issue  of  notes  which  were  a  legal  tender  at 
the  Custom  House  were  quoted  at  par  with  coin. 

EFFECT   OF   THE   AFORESAID  LAW. 

This  depreciation  of  the  greenback  encouraged  those  en- 
gaged in  rebellion  against  the  Government ;  increased  the 
chances  of  a  foreign  intervention,  which  would  have  de- 
stroyed the  national  unity  ;  and  thus  not  only  prolonged 
the  war  but  largely  added  to  the  cost  of  every  day  of  its 
continuance.  It  is  now  apparent  that  the  great  difference 
in  value  between  the  greenback  and  the  first  issue  of  treas- 
ury notes  was  due  to  the  different  legal  relations  and  condi- 
tions borne  by  those  different  kinds  of  paper  money. 

WHAT   MADE   THE   AFORESAID    LAW    POSSIBLE. 

The  mistake  of  not  receiving  the  greenbacks  for  custom 
duties  chiefly  arose  from  the  prevalent  and  curious  error  of 
supposing  gold  exempt  from  the  influence  of  natural  laws. 
Every  one  knows  that  an  increased  demand  for  real  estate 
raises  its  price,  and  that  a  diminished  demand  produces  a 
fall  in  its  value.  But  we  acted  on  the  theory  that  the  price 
of  gold  is  not  affected  by  the  causes  which  change  the 
prices  of  all  other  things.  By  making  coin  the  sole  legal 
tender  at  the  Custom  House,  we  increased  the  demand  for 
it ;  this  raised  its  price  just  as  an  increased  demand  for  silk 
would  raise  the  price  of  silk.  Refusal  to  receive  the  green- 
backs diminished  the  demand  for  them  ;  just  as  a  diminished 
use  for  fine  horses  would  lessen  the  demand  for  fine  horses. 


126  SOCIAL  STRUGGLES. 

A   PLEA   IN   DEFENSE    OF   THE   MONEY   LENDERS. 

OiTe  extenuating  plea,  however,  should  be  entered  in  de- 
fense of  the  aforesaid  traitorous  and  selfish  conduct  of  the 
lobby  of  capitalists.  Its  members,  taught  by  false  works  on 
political  economy,  were  to  a  considerable  extent  under  the 
delusion  that  gold  and  silver  possess  a  mysterious  intrinsic 
value  which  cannot  be  affected  by  legislation.  Therefore 
they  did  not  see  that  legislation  which  increased  the  demand 
for  coin  would  inevitably  increase  the  value  of  coin.  Fur- 
thermore, they  believed  that  legislation  could  not  create 
value,  and  therefore  they  failed  to  see  that  the  national  need 
of  a  medium  of  exchange  could  be  supplied  by  placing 
pieces  of  paper  under  certain  conditions  :  viz.,  making  them 
a  full  legal  tender  and  limiting  their  amount.  They  sup- 
posed that  the  sole  value  of  paper  money  under  all  circum- 
stances arose  from  the  existing  degree  of  probability  that 
at  some  future  time  it  would  be  received  by  the  Govern- 
ment, and  coin  given  in  exchange  therefor.  They  fancied 
that  nothing  was,  or  could  be,  money  but  coins  of  gold  or 
silver.  Ignorant  of  the  fact  that  the  value  of  all  things  is 
solely  the  product  and  result  of  conditions,  they  naturally 
failed  to  recognize  that  the  value  of  the  greenback  would  be 
adversely  affected  if  that  kind  of  money  were  placed  under 
adverse  conditions  by  the  national  Legislature. 

Tremendous  evils  flowed  from  incorporating  these  errors 
into  statute  law.  This  exemplifies  the  necessity  of  exam- 
ining fundamental  doctrines  before  believing  them.  We 
should  be  sure  our  foundation  is  solid  before  we  begin  to 
build  upon  it. 

EFFECT   OF   OTHER   LECxISLATION   ON    PAPER   MONEY. 

We  have  heretofore  found  that  the  adverse  conditions 
under  which  Congress  placed  the  greenback  at  the  time  of 
its  birth  were  created  to  satisfy  the  demands  of  the  bankers. 
Those  persons  for  a  long  time  had  enjoyed  the  legal  privi- 
lege of  issuing  their  own  notes  and  putting  them  in  circu- 
lation as  money  at   great   inconvenience,  expense  and  loss 


LIVING  BY  THE  LABOR  OF  OTHERS.  1 27 

to  the  public,  and  at  considerable  profit  to  themselves. 
They  instinctively  recognized  the  proposition  to  issue  na- 
tional paper  money  as  an  entering  wedge  which,  if  not  de- 
feated or  neutralized,  would  eventually  destroy  their  an- 
cient legal  right  to  levy  tribute  on  the  people.  This  trib- 
ute was  laid  and  collected  in  the  form  of  interest  on  the 
paper  money  issued,  and  in  the  profits  made  by  buying  such 
paper  money  at  large  discounts  at  places  remote  from  where 
it  was  nominally  convertible  into  coin. 

BANKERS'    SCHEMES. 

All  human  experience  teaches  that  persons  who  have 
once  lived  on  the  toil  of  others  are  usually  very  reluctant 
to  abandon  such  an  easy  means  of  support.  Over  twenty- 
four  years  have  elapsed  since  the  Legal  Tender  Act  was 
framed.  From  that  day  to  the  present  time  the  bankers 
have  been  continually  plotting  and  contriving  some  way  or 
means  to  prevent  the  issue  of  national  legal-tender  paper 
money.  This  opposition  to  the  greenback  is  carried  on 
under  the  pretense  that  it  is  contrary  to  "  financial  science  " 
for  a  government  to  issue  paper  money.  The  actual  rea- 
son is  not  only  a  desire  of  the  bankers  to  issue  their  own 
notes  as  money,  and  receive  interest  thereon,  but  also  the 
fact  that  by  destroying  the  greenback  the  field  for  the  use 
of  bank-notes  would  be  so  much  enlarged  thereby.  More- 
over, if  all  the  paper  money  of  the  country  were  issued  by 
the  bankers,  those  persons  would  have  more  power  and 
control  over  the  business  interests  of  the  nation.  Hence, 
persistent  efforts  have  been  made  to  place  in  the  hands  of 
a  few  men  the  power  to  increase  or  diminish  the  circulat- 
ing medium  of  the  country  in  such  manner  as  would  best 
promote  the  selfish  interests  of  those  few. 

These  schemes  have  been  numerous,  but  in  substance 
have  been  merely  various  ways  of  attaining  a  common  pur- 
pose. To  directl}^  suppress  the  greenback  ;  to  curtail  the 
amount  of  them  in  circulation,  and  to  surround  them  with 
adverse  conditions  and  thus  diminish  their  usefulness  and 
thereby  discredit  them   in  public   estimation,  have  all  been 


128  SOCIAL  STRUGGLES. 

component  parts  of  one  plan.  Let  us  in  outline  follow 
the  history  of  the  greenback,  and  see  how  far  these  attacks 
of  its  enemies  have  been  successful. 

The  principal  efforts  made  at  first  to  prevent  the  passage 
of  the  Legal  Tender  Act  were  made  by  arguments  intended 
to  show  that  it  would  disrupt  the  nation  and  array  all  capi- 
talists against  the  Government.  It  was  argued  that  Con- 
gress had  no  constitutional  power  to  enact  such  a  law,  and 
that  even  if  such  power  existed,  making  paper  money  a 
legal  tender  was  contrary  to  "  natural  laws  "  and  would 
therefore  be  a  useless  and  inoperative  incumbrance  on  the 
statute  books.  These  and  kindred  arguments  had  but 
little  effect. 

Failing  to  directly  prevent  the  issue  of  legal-tender  paper 
money  its  opponents  then  tried  to  indirectly  prevent  it  by 
a  limitation  of  its  legal-tender  qualities.  As  heretofore 
shown,  this  attempt  succeeded.  Greenbacks  were  deprived 
of  the  legal  power  to  be  used  in.  payment  of  custom  duties 
and  interest  on  the  Government  bonds. 

Human  aversion  to  new  things  is  shown  by  the  fact  that 
before  the  greenbacks  appeared  a  large  number  of  persons 
wondered  if  they  really  could  be  used  as  money.  The 
New  York  bankers  were  hostile  to  them.  But  they  passed 
freely  into  circulation,  and  their  superiority  over  the  exist- 
ing State  bank-notes  was  soon  recognized.  It  was  observed 
that  the  danger  of  their  being  counterfeited  was  much  less  ; 
and  that,  unlike  the  old  kind  of  paper  money,  they  could 
be  taken  from  State  to  State  and  passed  without  question. 

NATIONAL   BANK   ACT. 

The  bankers  saw  that  the  people  approved  of  the  green- 
backs and  preferred  them  to  the  issues  of  State  banks. 
They  also  saw  that  the  circulation  of  the  greenbacks  had 
struck  a' fatal  blow  at  paper  money  issued  under  State  au- 
thority. 

They  concluded  that  the  most  feasible  way  to  retain 
their  profitable  privilege  was  to  obtain  the  right  to  issue 
paper  money   under   national,   instead    of   State   authority. 


SUCCESS  OF  BAxYA'ERS'  SCHEMES. 


129 


Conferences  were  held,  and  the  final   result  was  that  on  the 
3d  of  June,  1864,  the  National  Bank  Act  was  passed. 

That  act  will  doubtless  appear  to  future  generations  as  an 
amazing  exhibition  of  effrontery  on  the  part  of  those  who 
asked  for  its  passage,  and  of  folly  in  those  who  enacted  it. 
It  is  a  long  document  but  its  essence  is  brief.  The  Govern- 
ment said  to  the  bankers  :  "  Organize  as  national  bankers 
under  this  act  ;  for  every  thousand  dollars  which  you  lend 
me  at  six  per  cent,  per  annum,  I  will  lend  you  nine  hun- 
dred dollars  at  one  per  cent,  per  annum." 

Instead  of  issuing  paper  money  directly  to  the  people 
with  little  expense  in  form  of  greenbacks,  without  interest, 
it  created  an  expensive  machinery  for  indirectly  issuing 
paper  money  through  the  hands  of  bankers.  The  bankers 
took  the  money  borrowed  of  the  Government  at  one  per 
cent,  per  annum  and  loaned  it  to  the  people  at  high  rates 
of  interest.  The  issue  of  national  bank-notes  inflated  the 
currency  and  thus  diminished  the  value  of  every  greenback 
in  circulation.  It  should  be  borne  in  mind  that  every  na- 
tional bank-note  inflated  the  currency  as  much  as  so  many 
greenbacks  would  have  done,  and  that  a  greater  total  of 
paper  money  was  issued  toward  the  close  of  the  war  than 
would  have  been  had  it  not  been  swollen  by  the  national 
bank  issues. 

In  effect,  the  National  Bank  Act  was  a  partially  success- 
ful attack  on  the  greenback.  By  its  passage  the  bankers 
attained  three  objects :  First.  They  curtailed  the  amount 
of  the  greenbacks  and  thus  left  a  wider  field  for  the  use  of 
national  bank-notes.  Second.  They  came  into  posses- 
sion of  the  value  created  by  the  law  which  authorized  the 
national  bank-notes.  This  value  is  broader,  and  therefore 
greater,  than  it  is  possible  for  State  authority  to  confer  on 
paper  money.  Third.  They  practically  retained  their  legal 
opportunity  to  levy  a  tax  on  the  people  without  giving  any 
adequate  return  therefor.  Every  dollar  of  interest  which 
has  been  paid  on  national  bank-notes  is  so  much  money 
stolen  from  the  people  under  forms  of  law,  from  the  simple 
9 


130 


SOCIAL  STRUGGLES. 


fact  that  for  every  bank-note   ivith   interest,    a   greenback 
without  interest  might  have  been  substituted. 

SUBTERFUGES. 

Recently  the  progress  made  in  the  reduction  of  the  nom- 
inal amount  of  the  national  debt,  and  the  great  fall  in  the 
nominal  rates  of  interest  paid  by  the  Government,  have 
greatly  diminished  the  profits  of  the  national  banks  and 
caused  a  diminution  in  their  circulation.  With  the  extinction 
of  the  national  debt  they  see  an  extinction  of  their  opportu- 
nity to  issue  paper  money.  Accordingly,  each  bankers" 
convention  brings  to  light  some  new  subterfuge  where- 
by its  members  hope  to  continue  to  get  money  without 
giving  an  equivalent  therefor. 

As  an  instructive  means  of  illustrating  the  effect  of 
legislation  on  value,  we  have  briefly  sketched  the  history  of 
the  greenback  down  to  the  passage  of  the  National  Bank 
Act.  We  found  that  said  act  created,  for  the  benefit  of 
bankers,  value  which  justly  belonged  to  the  whole  people. 
The  national  bankers,  by  lending  the  people  in  form  of 
national  bank-notes  the  value  created  by  the  people's  law- 
makers, have  received  a  large  amount  of  interest.  This  in- 
terest has  been  paid  by  the  people  on  value  created  by  their 
own  laws,  and  properly  belonging  to  themselves. 

WHY  NATIONAL  BANK-NOTES  HAVE  NOT   BEEN  DESTROYED. 

Why  has  not  the  intelligence  of  the  American  people,  en- 
larged by  the  discussion  which  has  occurred  since  1864,  abol- 
ished the  national  bank-notes  and  replaced  them  with 
greenbacks  ? 

Three  causes  have  combined  to  prevent  such  a  desirable 
thing  as  the  extinction  of  all  kinds  of  paper  money  but  that 
directly  issued  by  the  nation  : 

First.  'Bad  in  principle  as  the  National  Bank  Act  is,  in 
fact  it  is  a  far  less  evil  than  the  old  system  of  State  banks. 
This  is  simply  because  the  paper  money  of  national  banks 
is  placed  under  better  and  more  uniform  conditions  than 
the  paper  money  of  the  State  banks  was.     Instead  of  look- 


BORROWING  MONEY  AT  ONE  PER  CENT.  PER  ANNUM.    131 

ing  forward  to  see  how  feasible  a  still  further  improvement 
of  their  currency  is,  the  people  have  been  looking  backward 
and  rejoicing  over  the  evils  from  which  they  have  escaped. 

Second.  The  public  press  of  the  large  cities  has  been 
chiefly  printed  in  the  interest  of  the  national  banks,  and 
has  not  fairly  presented  the  facts  to  their  readers. 

The  amount  of  tax  paid  by  the  national  bankers  has 
been  constantly  recited  as  an  all-sufficient  reason  why  spe- 
cial privileges  should  be  granted  to  that  class  of  persons. 
But,  on  the  same  principle,  the  farmers  of  the  country 
could  gather  statistics  showing  the  amount  of  tax  which 
they  pay,  and  thereupon  claim  privileges  not  enjoyed  by 
other  citizens. 

Third.  Congress  and  the  national  administration,  from 
the  close  of  the  war  to  the  present  day,  with  a  few  excep- 
tional acts,  have  steadily  exerted  their  influence  in  favor  of 
the  national  bankers  and  others  of  the  wealthier  classes  of 
society. 

ATTACKS   ON   THE   GREENBACKS. 

As  heretofore  stated,  the  opponents  of  the  greenback 
sought  to  prevent  the  enactment  of  the  legal-tender  act  by 
urging  the  unconstitutionality  of  such  a  law.  Soon  after  its 
passage,  measures  were  taken  to  bring  the  law  before  the 
United  States  Supreme  Court,  in  the  hope  that  said  tri- 
bunal would  declare  Congress  to  have  no  right  in  time  of 
war  to  make  paper  money  a  legal  tender.  But  a  series  of 
decisions  which  affirmed  the  right  of  Congress  in  time  of 
war  to  issue  legal-tender  paper  money  destroyed  the  fond 
anticipations  of  those  who  denied  the  existence  of  such 
a  power,  and,  at  the  same  time,  claimed  that  no  value 
whatever  could  thereby  be  created  if  it  were  exercised. 

Finally,  it  was  set  forth  with  great  positiveness  that 
a  though  it  might  be  constitutional  in  time  of  war  to  issue 
paper  money  and  make  it  a  legal  tender,  yet  it  was 
clearly  unconstitutional  to  issue  paper  money  as  a  legal 
tender  in  time  of  peace.  The  slowness  with  which  events 
occur  in  this  world  is  shown  by  the  fact  that  over  twenty 


J  22  SOCIAL  STRUGGLES. 

years  elapsed  after  the  passage  of  the  Legal  Tender  Act 
before  its  legaHty  was  finally  passed  on  by  the  Supreme 
Court.  A  full  bench,  with  only  one  dissenting  voice, 
afifirmed  the  constitutional  right  of  Congress  at  any 
time  to  issue  paper  money  and  make  it  a  legal  tender. 

The  judge  who  dissented  from  the  views  of  his  associates 
apparently  based  his  opinion  on  the  hypothesis  that  leg- 
islation cannot  create  value,  because,  if  that  were  so,  an 
unlimited  amount  of  value  could  be  created  by  law. 

This  learned  judge  should  also  have  told  us  thkt  it 
was  impossible  for  a  man  to  swim, — because  if  he  could 
swim  there  was  nothing  to  prevent  him  from  swimming 
across  the  Atlantic  Ocean.  He  should  have  considered 
that  if  legislation  cannot  create  value  the  greenbacks  have 
always  been  worthless,  and  therefore  no  decision  of  the 
Suprerne  Court  could  lessen  their  value. 

The  aforesaid  decisions  of  the  Supreme  Court  by  re- 
moving all  doubt  of  their  legality  have  placed  the  green- 
backs on  a  more  assured  foundation,  and  thereby  fortified 
their  value.  Soon  after  the  last  named  decision  was  made, 
Senator  Bayard,  the  present  Secretary  of  State,  proposed  to 
amend  the  constitution  so  as  to  prevent  the  issue  of  legal- 
tender  paper  money.  But  this  proposal,  except  by  the 
friends  of  the  banking  interest,  was  received  with  derision 
as  a  device  to  mold  the  supreme  law  of  the  land  in  the 
interest  of  the  bankers. 

THE   FIVE-TWENTY   BONDS. 

As  heretofore  seen,  the  lobby  who  went  to  Washington 
in  1862  to  effect  a  change  in  the  Legal  Tender  Act  con- 
fined themselves  to  procuring  two  limitations,  which  every 
one  can  now  see  on  the  back  of  each  greenback.  "  This 
note  is  a  legal  tender  at  its  face  value  for  all  debts,  public 
and  private,  except  duties  on  customs  and  interest  on 
tJie public  debt."'  Nothing  is  included  in  the  "  except  "  but 
custom  duties  and  interest  on  the  public  debt.  The 
principal  was  clearly  payable  in  greenbacks.  John  Sher- 
man   said    so,  and    he    denounced   any   man   who    should 


WHAT  WAS  THOUGHT  I]V  1862. 


133 


ask  to  be  paid  otherwise  as  a  "  Shylock."  Similar  views 
were  expressed  by  Benjamin  Wade,  Oliver  P.  Morton, 
Thaddeus  Stevens,  and  other  leaders  of  the  Republican 
party  who  participated  in  the  creation  of  the  Legal  Tender 
Act. 

The  bonds  issued  under  authority  of  this  act  were  six 
per  cent,  bonds,  and  were  known  as  "  five-twenties." 

In  March,  1864,  Congress  supposed  that  money  could 
be  borrowed  at  five  per  cent,  if  bonds  were  issued  more 
satisfactory  to  the  capitalists  than  the  five-twenty  six  per 
cent,  bonds.  Accordingly,  the  "ten-forty"  bonds  were 
issued.  These  bonds  bore  five  per  cent,  interest  in  coin, 
and,  in  compensation  for  the  reduction  of  interest,  the  prin- 
cipal was  expressly  made  payable  in  coin.  At  the  passage 
of  that  act,  coin  was  at  a  premium  of  160  and  was  soon  quoted 
at  over  200.  The  difference  of  interest  between  the  five  and 
the  six  per  cent,  bonds  was  therefore  about  two  per  cent. 
in  greenbacks,  and  for  this  reason  a  comparatively  small 
amount  of  these  bonds  was  issued.  The  great  bulk  of 
the  debt  became  composed  of  the  so-called  five-twenty 
six  per  cent,  bonds,  with  interest  payable  in  coin  and  the 
principal  payable  in  greenbacks. 

On  the  first  day  of  May,  1865,  although  the  war  had 
terminated,  and  the  future  tranquillity  and  prosperity  of 
the  nation  were  assured,  coin  was  quoted  at  145.  The 
greenbacks,  crippled  by  legal  disability  to  pay  custom 
duties  and  interest  on  the  public  debt,  were  at  a  discount. 

The  holders  of  the  six  per  cent,  bonds  and  of  the  seven- 
thirty  bonds,  which  were  convertible  into  five-twenties  at 
maturity,  saw  that  they  had  made  a  thrifty  bargain  with 
the  Government.  They  w^ere  entitled  to  six  per  cent,  in- 
terest in  coin,  which  was  equivalent  to  about  eight  per  cent, 
in  greenbacks  ;  and  their  bonds  were  exempt  from  State  or 
municipal  taxation. 

DIFFICULTY    OF    SATISFYING    AVARICE. 

But  the  pleasure  .of  the  leading  holders  of  bonds  was 
sadly  marred    by   the  reflection    that    although    they   had 


134 


SOCIAL  STRUGGLES. 


made  a  good  bargain  for  themselves,  a  still  better  bargain 
might  possibly  have  been  made,  in  the  time  of  the  nation's 
peril  and  distress,  if  they  had  wrongly  thought  far  enough 
and  had  assurance  enough  to  have  availed  themselves  of 
the  opportunity  to  make  a  harder  bargain  with  the  Govern- 
ment, At  the  time  of  the  framing  of  the  law  creating  the 
six  per  cent,  bonds,  they  were  satisfied  with  its  provisions. 
But  of  all  the  passions,  avarice  is  most  rarely  satisfied. 
Other  passions  may  often  be  allayed  by  gratification,  but 
avarice  usually  grows  more  unsatiable  in  proportion  as  it  is 
supplied  with  food. 

A    HYPOCRITICAL   PRETENSE. 

After  conferring  with  each  other,  and  considering  the 
best  means  of  placing  the  country  under  still  greater  tribute 
to  them,  the  bondholders  concluded  to  pretend  and  insist 
that  the  bargain  which  they  now  regretted  not  making  had 
actually  been  made.  In  consideration  of  receiving  six  per 
cent,  interest  in  coin,  and  of  having  the  custom  duties 
mortgaged  to  secure  such  interest,  they  had  agreed  that  the 
principal  of  the  bonds  should  be  paid  in  greenbacks.  But 
this  agreement  they  now  repudiated,  and,  instead  thereof, 
demanded  that  the  written  and  well  understood  bargain 
should  be  so  changed  as  to  make  the  bonds  payable  in  coin. 

PROCLIVITY    OF   MANKIND   TO   HYPOCRISY. 

Naturalists  and  anatomists  have  devoted  much  labor  to 
pointing  out  the  peculiarities  of  physical  structure,  and  men- 
tal endowments  and  traits  which  distinguish  man  from  other 
animals.  But  an  additional  volume  could  be  written  in  illus- 
tration of  the  fact  that  among  all  the  multitudes  of  animals 
on  earth  man  is  pre-eminently  the  hypocritical  animal. 
Man  is  the  only  animal  that  commits  a  considerable  portion 
of  the  acts  of  his  life  under  false  pretenses. 

Nations  are  simply  aggregations  of  human  individuals. 
National  acts  are  therefore  human  acts  done  on  such  a 
large  scale  that  the  mental  traits  of  the  different  individuals 
are  blended  in  a  picture  of  the  average  man,  whose  conduct 


FALSE  AND  DELUSIVE  CRIES. 


135 


is  often  more  easily  studied  than  the  acts  of  one  isolated 
man  woidd  be.  The  history  of  all  national  crimes  tells  a 
painfully  monotonous  story;  i.  c,  as  far  as  it  is  possible  for 
him  to  do  so,  man  always  commits  a  crime  in  the  name  of 
some  virtue.  England  has  recently  added  to  the  thousands 
of  illustrations  of  this  fact.  She  went  into  Africa  to  rob 
tlie  natives,  and  committed  many  murders  in  attempting  it. 
But  this  wretched  crime  was  not  done  under  its  true  name, 
but  under  pretext  of  "  maintaining  order  and  extending 
Christianity  and  civilization." 

England  has  recently  taken  formal  possession  of  an  im- 
mense tract  of  land  in  Southern  Africa.  But  this  robbery 
has  been  committed  under  pretext  of  a  desire  "  to  benefit  the 
native  tribes."  France  once  had  a  war  in  which  the  com- 
mon people  had  the  same  interest  that  a  flock  of  sheep  has 
in  the  wrangles  of  two  rival  packs  of  wolves.  This  war,  by 
a  refinement  of  hypocrisy,  was  styled  "  the  war  for  the 
public  good." 

A  multitude  of  examples  similar  to  the  foregoing  might 
be  cited,  all  tending  to  show  that  the  various  forms  of 
wrongs  constantly  being  committed  are  almost  invariably 
given  the  name  of  some  virtue  by  their  authors. 

The  scheme  by  which  the  holders  of  United  States  bonds, 
payable  in  greenbacks,  procured  legislation  making  them 
payable  in  coin  reminds  us  of  the,  long  passed  war  for 
"  the  public  good."  It  was  carried  out  under  pretense  of 
"  strengthening  the  public  credit  "  and  in  the  name  of  "  hon- 
esty." If  the  real  nature  of  this  scheme  had  been  generally 
known  it  would  have  been  defeated  ;  as  it  was,  the  people 
sanctioned  it  under  the  delusion  that  it  was  what  it  pre- 
tended to  be, — a  measure  of  justice. 

On  the  first  day  of  August,  1865,  the  United  States  debt 
reached  its  highest  point,  and  amounted  to  $2,845,907,626. 
In  round  numbers,  by  a  liberal  construction  of  their  con- 
tracts in  favor  of  the  bondholders,  about  one-sixth  of  this 
vast  sum  was  payable  in  coin  ;  the  other  five-sixths  were 
payable  in  greenbacks,  both  legally  and  morally.  Coin 
was  then  at  a  premium  of  forty-four  per  cent. 


136  SOCIAL  STRUGGLES. 

MEANS   EMPLOYED   TO   PERPETRATE  A   CRIME, 

Soon  after  the  close  of  the  war,  the  bondholders  and 
their  representatives  began  to  flood  the  country  with  state- 
ments and  arguments  intended  to  induce  the  American  peo- 
ple to  pay  the  bonds  in  a  manner  different  from  what  had 
been  agreed  upon.  These  pleas  were  numerous,  but  their 
substance  can  be  briefly  stated. 

"  Honesty  is  a  great  virtue.  Without  money  the  Government  could 
not  have  carried  on  the  war  and  the  Union  would  have  been  divided. 
Disunion  would  have  been  a  terrible  blow  to  the  prosperity  of  the  country. 
The  national  creditors  should  be  honored  for  lending  money  to  carry  on 
the  war, — their  services  were  so  great  that  the  nation  can  well  afford  to 
pay  them,  not  simply  according  to  the  letter  of  the  contract,  but  as 
their  merits  entitle  them.  Let  us  be  honest.  The  national  debt  is  a 
sacred  obligation.  If  the  bonds  should  be  paid  according  to  the  letter 
of  the  contract  the  public  credit  would  be  ruined  ;  in  case  of  a  future 
war  no  one  would  lend  the  Government  money,  and  therefore  the  nation 
would  be  ruined.  Let  us  be  honest  and  pay  the  bonds  in  coin.  Every 
bond  is  as  sacred  as  a  soldier's  grave.     Honesty  is  the  best  policy." 

The  above  sentiments  were  amplified  into  thousands  of 
articles  and  editorials,  and  millions  of  copies  were  distributed 
throughout  the  country.  Every  one  who  ventured  to  say 
that  the  rights  of  public  creditors  were  neither  more 
nor  less  "  sacred "  thaji  the  rights  of  tax-payers  was  de- 
nounced as  "  dishonest."  After  the  discussion  had  pro- 
gressed for  some  time  it  was  claimed  that  the  Government 
had  actually  agreed  to  pay  the  bonds  in  coin. 

The  country  was  flooded  with  pretended  statistics  show- 
ing that  "  the  majority  of  the  bonds  were  owned  by  poor 
men."  Toward  the  close  of  the  debate  several  of  the,  so- 
called,  religious  papers  proclaimed  with  great  positiveness 
the  notorious  lie  that  the  bonds  had  been  paid  for  in  coin, 
and  therefore  should  in  equity  be  discharged  in  coin.  In 
a  country  with  an  extended  privilege  of  suffrage,  great 
questions  inevitably  assume,  sooner  or  later,  a  political 
aspect.  The  first  national  convention  which  was  held 
after  the  close  of  the  war  for  the  purpose  of  adopting  party 


SUCCESS  OF  FRAUD.  1 37 

principles  and  nominating  presidential  candidates,  took  up 
the  question  of  the  proper  mode  of  paying  the  bonds  pay- 
able in  greenbacks  by  the  contract  when  the  bonds  were 
issued. 

The  prospects  of  the  success  of  the  Republican  party  were 
much  the  brightest,  and  the  majority  of  the  bondholders 
belonged  to  that  party.  Hence,  the  Republican  party  was 
chosen  as  the  best  instrument  to  carry  out  the  scheme  afore- 
said.    The  platform  of  the  Republican  party  declared  : — 

"  That  national  honor  requires  the  payment  of  the  public  indebtedness 
in  the  uttermost  good  faith  to  all  creditors,  at  home  and  abroad,  not  only 
according  to  the  letter,  but  the  spirit  of  the  laws  under  which  it  was  con- 
tracted." 

The  convention  denounced  all  forms  of  repudiation  as  "  a 
national  crime,"  and  nominated  Ulysses  S.  Grant  for  Presi- 
dent.    This  occurred  May  21,  1868. 

The  Democratic  National  Convention  assembled  July  4, 
1868,  and  declared  that  : — 

"  When  the  obligations  of  the  Government  do  not  expressly  state  upon 
their  face,  or  the  law  under  which  they  were  issued  does  not  provide,  that 
they  shall  be  paid  in  coin,  they  ought,  in  right  and  justice,  to  be  paid  in 
the  lawful  money  of  the  United  States." 

Horatio  Seymour  was  nominated  for  President. 

WHY   HORATIO    SEYMOUR   WAS   DEFEATED. 

Hundreds  of  millions  of  capital  were  at  once  arrayed 
against  the  Democratic  candidate,  and  the  majority  of  vot- 
ers did  not  understand  the  real  issue.  Besides  the  support 
of  the  bondholders,  the  Republican  party  had  the  prestige, 
of  having  successfully  carried  on  the  war  that  restored  the 
Union.  Many  persons  believed  that  Horatio  Seymour  had 
befriended  the  national  enemies.  The  result  of  the  election 
was  the  casting  of  the  majority  of  electoral  votes  for  Ulysses 
S.  Grant.  Although  war  issues  had  been  the  dominant  feat- 
ure of  the  election  campaign,  and  the  financial  question  had 
not  been  understood,  the  result  was  interpreted  as  a  popu- 
lar decision  in   favor  of  paying  the  bonds  in  coin.     History 


138 


SOCIAL  STRUGGLES. 


again  repeated  itself.     A  false  pretense  deceived  the  people, 
just  as  they  have  been  misled  from  time  immemorial. 

On  the  1 8th  of  March,  1869,  the  bonds,  which  all  impar- 
tial persons  had  no  doubt  were  payable  in  greenbacks,  were 
made  payable  in  coin  by  an  act  entitled,  "  An  act  to 
strengthen  the  public  credit."  Coin  was  then  quoted  at  131. 
Two  months  afterwards  it  was  142,  The  preamble  to  this 
hypocritical  law  betrays  the  consciousness  of  its  authors  that 
a  falsehood  was  being  stated.     It  begins  : 

"  In  order  to  remove  any  doubt  as  to  the  purpose  of  the  Government  to 
discharge  all  just  obligations  to  the  public  creditors,  and  to  settle  conflict- 
ing questions  and  interpretations  of  the  laws  by  virtue  of  which  such  ob- 
ligations have  been  contracted." 

NATIONAL  CREDIT. 

The  credit  of  a  nation  depends  not  only  on  the  ability  of 
its  citizens  to  pay  the  taxes  requisite  to  discharge  all  na- 
tional obligations,  but  on  their  zvil/ingness  to  do  so.  If  the 
tax-payers,  by  unjust  laws,  are  called  on  to  pay  more  than 
they  really  owe,  they  are  robbed  to  the  extent  they  pay 
more  than  the  contract  called  for.  The  inevitable  tendency 
of  such  unjust  laws  is  to  create  a  public  contempt  for  all 
laws.  The  aforesaid  act  should  therefore  have  been  named  : 
"  An  act  to  rob  the  tax-payers  and  thereby  weaken  the  foun- 
dation of  public  credit."  For  it  is  certain  that  a  repetition 
of  similar  acts  would  eventually  result  in  a  public  discovery 
of  their  real  nature,  and  a  repudiation  of  all  national  debts. 
But  laws  which  deal  impartial  justice  to  both  tax-payer  and 
public  creditor  can  safely  be  repeated  an  indefinite  number 
of  times. 

WHAT   EXPERIENCE   TEACHES. 

A  very  considerable  number  of  bond  owners  who  advocated 
the  aforesaid  change  of  contract  were  probably  unconscious 
of  a  desire  to  cheat  the  people.  But,  as  all  experience 
shows  that  the  most  upright  judge  should  not  be  trusted  to 
try  a  case  in  which  he  has  a  pecuniary  interest,  it  is  contrary 
to  public  policy,  and  a  dangerous  precedent,  to  allow  a  small 


RESUL  TS  OF  RASCALITY.  I  -,q 

number  of  persons,  whose  interests  are  adverse  to  those  of 
the  masses,  to  change  an  estabHshed  mode  of  interpreting 
contracts. 

EFFECT   OF   ACT   OF    MARCH    1 8,    1 869. 

Let  us  next  consider  the  effect  which  the  above  described 
legislation  had  on  values.  By  preventing  the  use  of  the 
greenbacks  in  payment  of  the  five-twenty  bonds,  according 
to  the  original  agreement,  it  diminished  the  uses  to  which 
the  greenbacks  could  be  put,  and  thereby,  by  placing  them 
under  still  further  adverse  conditions,  struck  an  additional 
blow  at  their  value. 

In  fact,  the  said  act  was  thus  a  partial  repudiation  of  the 
greenbacks.  If  they  had  been  used  according  to  the  orig- 
inal intent,  the  demand  for  greenbacks  would  have  been  in- 
creased, and  the  demand  for  coin  diminished.  The  inevita- 
ble result  would  have  been  a  relative  fall  in  the  value  of 
coin,  and  a  corresponding  rise  in  the  value  of  the  greenbacks. 

The  act  of  March  18,  1869,  did  what  its  authors  ex- 
pected and  desired:  it  increased  the  value  of  the  bonds 
which  previously  were  payable  in  greenbacks.  This  was  a 
specimen  illustration  of  a  form  of  legislation  which  unfort- 
unately is  not  of  rare  occurrence.  No  new  value  whatever 
was  created  by  the  said  act  ;  it  merely  added  value  to  one 
kind  of  property,  and  subtracted  value  from  all  other  kinds 
of  property.  In  fact,  by  deranging  the  relation  of  things, 
as  w'ill  hereafter  be  more  fully  shown,  it  actually  diminished 
the  total  amount  of  value  in  the  country.  It  also  indirectly 
placed  an  additional  tax  on  the  earnings  of  ev^ery  laborer  in 
the  country.  It  was  simply  a  huge  theft  committed  by 
changing  existing  obligations  into  heavier  burdens  under 
pretense  of  helping  the  people  by  "strengthening"  their 
credit. 

WHEN    LEGISLATION   CREATES    VALUE. 

Legislation  actually  creates  value  only  when,  by  supplying 
new  conditions,  some  industrial  or  commercial  deficiency  or 
want  is  filled  ;  or,  Avhen  some  latent  wealth-creating  force  is 


I40 


SOCIAL  STRUGGLES, 


thereby  evoked  or  organized.  A  distinction  should  be  care- 
fully made  between  the/rw  legislative  acts  which  actually 
create  value,  and  the  many  laws  which  merely  transfer  the 
value  rightfully  owned  by  one  class  of  persons  to  another 
class,  without  giving  adequate  compensation  therefor. 
Whenever  legislators  neglect  to  guard  the  rights  of  all  classes 
of  persons  with  equal  fidelity  they  fail  of  their  duty.  By 
enacting  laws  which  increase  the  value  of  one  man's  prop- 
erty at  the  expense  of  another  man,  they  legalize  robbery 
and  repudiate  their  obligations  to  recognize  the  equality  of 
all  men  in  the  eyes  of  the  law. 

OTHIiR   ACTS   OF   REPUDIATION   AND   DISGRACE. 

We  have  seen  that  the  act  of  March  i8,  1869,  was  a  par- 
tial repudiation  by  Congress  of  the  contract  under  which  the 
greenbacks  were  issued  to  the  people.  But  this  was  not  the 
only  act  committed  by  men  who  in  political  convention  de- 
nounced all  forms  of  repudiation  as  "  a  national  crime." 
The  Legal  Tender  Act  which  created  the  greenbacks  said  : — 

"  And  any  holders  of  said  United  States  notes  depositing  any  sum  not 
less  than  fifty  dollars,  or  some  multiple  of  fifty  dollars,  with  the  Treas- 
urer of  the  United  States,  or  either  of  the  assistant  treasurers,  shall  re- 
ceive in  exchange  therefor  duplicate  certificates  of  deposit,  one  of  which 
may  be  transmitted  to  the  Secretary  of  the  Treasury,  who  shall  thereup- 
on issue  to  the  holder  an  equal  amount  of  bonds  of  the  United  States, 
coupon  or  registered,  as  may  by  said  holder  be  desired,  bearing  interest 
at  the  rate  of  six  per  centum  per  annum,  payable  semi-annually,  and 
redeemable  at  the  pleasure  of  the  United  States  after  five  years,  and 
payable  twenty  years  from  the  date  thereof." 

By  the  foregoing  clause,  the  United  States  clearly  agreed 
with  the  holders  of  certain  notes  therein  described,  to  allow 
them  to  fund  them  at  their  pleasure  into  five-twenty  six  per 
cent,  bonds.  On  the  3d  of  March,  1863,  Congress,  suppos- 
ing that  a  five  per  cent,  bond,  with  the  principal  payable  in 
coin,  would  be  more  advantageous  to  the  Government,  and 
be  considered  more  desirable  by  the  people  than  a  six  per 
cent,  bond  with  the  principal  payable  in  greenbacks,  passed 
an  act  which  authorized  the  issue  of  five  per  cent,  bonds 
with  both  interest  and  principal  payable  in  coin.     This  act 


ACTS  OF  repudiation: 


141 


referred  to  the  acts  which  authorized  the  greenbacks,  and 
said  : 

"  And  the  holders  of  United  States  notes,  issued  under  and  by  virtue  of 
said  acts,  shall  present  the  same  for  the  purpose  of  exchanging  the  same 
for  bonds,  as  therein  provided,  on  or  before  the  first  of  July,  1863,  and 
thereafter  the  right  so  to  exchange  the  same  shall  cease  and  determine." 

This  repeal  of  the  right  to  convert  greenbacks  into  five- 
twenty  bonds  was  done  for  the  purpose  of  inducing  people 
to  convert  greenbacks  into  the  five  per  cent,  bonds.  But  it 
was  a  partial  repudiation  of  the  right  to  convert  greenbacks 
into  six  per  cent,  bonds — a  right  that  was  then  inscribed  on 
the  back  of  every  greenback.  It  placed  the  greenbacks  un- 
der different  conditions  from  those  under  which  they  were 
issued. 

The  exigencies  of  the  war,  however,  compelled  the  Gov- 
ernment to  practically  resume  the  sale  of  five-twenty  six  per 
cent,  bonds  at  par  in  greenbacks  until  the  close  of  the  war. 
But  the  temporary  suspension  of  such  sales  had  an  unfavor- 
able effect  on  the  national  finances.  In  fact,  this  was  one  of 
the  most  serious  mistakes  in  the  conduct  of  the  war.  Water 
never  rises  higher  than  the  dam  which  retains  it.  Had  the 
convertible  feature  of  the  greenbacks  remained  undisturbed, 
and  had  proper  efforts  been  made,  all  the  money  needed  by 
the  Government  could  have  been  obtained  without  the  suc- 
cessive issues  of  legal  tenders,  which  were  afterward  deemed 
necessary.  Whenever  more  greenbacks  were  in  circulation 
than  necessary,  they  would  have  been  converted  into  bonds. 

The  right  to  convert  greenbacks  into  five-twenty  bonds 
soon  after  the  close  of  the  war  would  have  made  the  green- 
backs worth  as  much  as  coin.  At  the  time  when  the 
bonds  became  worth  their  face  in  coin,  the  greenbacks 
would  have  had  the  same  value  if  the  original  contract  had 
been  kept. 

The  Legal  Tender  Act  of  February  25,  1862,  contained  this 
clause  : 

"  And  such  United  States  notes  shall  be  received  the  same  as  coin,  at 
their  par  value,  in  payment  for  any  loans  that  may  be  hereafter  sold  or 
negotiated  by  the  Secretary  of  the  Treasury." 


142 


SOCIAL  STRUGGLES. 


The  aforesaid  clause  made  a  contract  which  Congress  re- 
pudiated on  the  14th  of  July,  1870.  An  act  was  then 
passed  authorizing  the  issue  of  five  per  cent.,  four  and  a 
half  per  cent,  and  four  per  cent,  bonds.  This  act  provided 
that  in  payment  for  the  bonds  authorized  by  it  the  out- 
standing five-twenty  bonds  should  be  received  at  their  face 
value,  but,  instead  of  receiving  greenbacks  at  their  face 
value,  according  to  the  original  agreement,  it  said : 

"  The  Secretary  of  the  Treasury  is  hereby  authorized  to  sell  and  dis- 
pose of  any  of  the  bonds  issued  under  this  act  at  not  less  than  their  par 
value  in  coin." 

The  act  of  July  14,  1870,  was  thus  another  repudiation 
of  the  contract  under  which  the  greenbacks  were  issued. 
It  placed  the  greenbacks  under  still  further  adverse  condi- 
tions, and  thereby  struck  another  blow  at  their  value.  If 
the  greenbacks  had  been  receivable  for  the  bonds,  the  de. 
mand  for  greenbacks  would  have  been  increased  and  the 
demand  for  coin  diminished.  The  inevitable  result  would 
have  been  a  relative  fall  in  the  value  of  coin,  and  a  corre- 
sponding rise  in  the  value  of  greenbacks. 

WHAT    MADE   THE   AFORESAID    WRONGS   POSSIBLE. 

Two  things  made  this  further  repudiation  of  national 
promises  possible. 

First.  The  majority  of  the  "  statesmen  "  who  composed 
Congress  had  not  the  faintest  knowledge  of  the  nature  of 
value  or  of  the  causes  which  create  it.  Second.  Such  a 
straightforward  way  of  doing  business  as  the  reception  of 
the  greenbacks  for  bonds,  and  their  consequent  increase  in 
value,  would  not  have  suited  the  purpose  of  the  compara- 
tively few  persons  who  controlled  the  financial  policy  of 
the  nation.  That  purpose  was  to  reduce  the  wages  of 
labor,  the  prices  of  the  products  of  labor,  and  the  value  of 
all  kinds  of  property  except  money  and  bonds,  mortgages 
and  other  evidences  of  claims  for  the  payment  of  money. 

On  the  15th  of  July,  1875,  in  furtherance  of  said  purpose, 
the  so-called  Resumption  Act  was  passed.  Instead  of 
chauCTinCT   the   adverse  conditions  under  which   the   green- 


COSTLINESS  OF  IGNORANCE.  1 43 

backs  had  been  placed  by  the  successive  acts  aforesaid,  as 
should  have  been  done,  by  at  once  placing  them  in  all  re- 
spects on  a  legal  equality  with  coin,  their  legal  disabilities 
were  continued.  Ignorant  of  the  simple  fact  that  all  values 
depend  solely  upon  conditions,  Congress  saw  no  other  way 
to  place  greenbacks  and  coin  on  an  equality  of  value  but 
to  buy  and  hoard  coin  for  use  after  January  i,  1879,  ^'^  ^^- 
demption  of  the  greenbacks. 

FRUITS   OF   CRIME   AND    FOLLY. 

The  result  of  this  act  was  to  increase  the  demand  for 
coin,  and  consequently  to  increase  its  value.  This  was  at 
once  made  apparent  by  the  fall  in  the  prices  of  labor  and  all 
kinds  of  property,  except  money  and  well-secured  claims  for 
its  payment.  An  element  of  uncertainty  was  thus  intro- 
duced in  the  financial  and  business  situation.  People  were 
apprehensive  of  the  future,  and  hoarded  their  money.  The 
currency  was  thus  contracted  and  the  volume  of  business 
correspondingly  reduced.  Large  numbers  of  laborers  were 
thrown  out  of  employment,  and  the  production  of  wealth 
throughout  the  country  was  thereby  greatly  diminished. 
Numerous  bankruptcies  occurred,  and  an  army  of  tramps 
sprang  into  existence  and  began  to  menace  the  security  of 
property.  On  February  28,  1878,  alarmed  at  the  growing 
and  threatening  consequences  of  their  criminal  folly.  Con- 
gress passed  an  act  for  the  coinage  of  silver.  This  act,  al- 
though seriously  defective,  produced  one  good  effect  imme- 
diately. It  showed  business  men  that  the  contraction  of 
the  currency  to  a  gold  basis  was  temporarily  and  partially 
arrested,  and  that  less  immediate  danger  from  that  source 
existed. 

After  the  ist  of  January,  1879,  ^^^^  greenbacks,  although 
not  legally  on  an  equality  with  com,  were  practically  so 
placed.  The  result  was  that  the  anticipated  enormous  de- 
mand for  coin  did  not  occur,  simply  because  the  conditions 
surrounding  the  greenback,  being  practically  the  same  as 
those  surrounding  coin,  few  persons  cared  to  exchange 
them   for  coin.      Distrust   of  the   future  was  removed  and 


144 


SOCIAL  STRUGGLES. 


business  began  to  revive.  After  suffering  unnecessary  and 
enormous  losses  through  the  derangement  of  business  and 
idleness  of  machinery  and  labor,  we  finally  reached  the 
point  we  might  have  attained  soon  after  the  close  of  the 
war  if  our  legislators  had  comprehended  the  fundamental 
principles  which  govern  the  creation  of  value,  and  had 
made  laws,  not  for  the  aggrandizement  of  a  class,  but  for 
the  welfare  of  the  whole  people. 

.  We  have  now  seen  that  successive  laws  have  been  enacted 
without  proper  reference  to  their  effect  on  values.  It  is, 
however,  a  mistake  to  say  that  these  laws  were  enacted  in 
the  interest  of  "  capital."  They  were  in  fact  formed  in  the 
interest  of  a  particular  kind  of  capital  ;  viz.,  money,  and 
documents  calling  for  its  payment.  These  ill-advised  meas- 
ures, by  deranging  business  and  throwing  vast  numbers  of 
workmen  out  of  employment,  subjected  the  nation  to  great 
hardships  and  enormous  losses,  which  might  have  been 
mostly  averted  by  judicious  laws. 

VIEWS   OF  A   SO-CALLED   STATESMAN. 

In  reply  to  the  aforesaid  criticism  one  of  the  United 
States  senators  has  been  applauded  for  saying  that  : — 

"  When  a  labor  is  to  be  performed,  or  a  burden  borne,  it  makes  but 
little  difference  how  it  is  done  ;  the  great  thing  is  to  do  it." 

Just  as  ignorant  people  imagine  the  skill  of  a  physician 
is  measured  by  the  nauseous  nature  of  his  prescriptions  and 
their  unpleasant  effects,  many  "  statesmen  "  suppose  that 
the  sufferings  attendant  on  bad  financial  measures  are  nec- 
essary and  inevitable.  Furthermore,  they  assume  that 
a  great  amount  of  industrial  and  business  derangement 
betokens  the  wisdom  of  the  laws  which  produce  it. 

SIMPLE   FACTS   OVERTHROW   FALSE   THEORIES. 

Two  roads  may  finally  lead  a  traveler  to  the  same  place. 
But,  one  of  these  roads  may  be  straight  and  easy,  while 
the  other  is  crooked  and  very  difficult  and  dangerous. 
A  little  reflection  ought  to  convince  any  one  that  the 
manner  in  which   a  particular  thing  is    done   often   deter- 


NEED  OF  GREA  TER  INTELLIGENCE. 


145 


mines  whether  it  is  an  easy  or  an  onerous  task.  A  journey 
from  New  York  to  Chicago  with  eighty  pounds  of  baggage 
is  not  a  difficult  thing  when  made  in  a  raih'oad  car;  but  if 
it  had  to  be  performed  on  foot  with  the  baggage  carried 
on  the  back  it  would  be  quite  an  undertaking.  A  man 
can  put  a  hundred-pound  keg  of  nails  on  a  wheelbarrow 
and  wheel  it  over  a  good  road  a  mile  t\'ith  compara- 
tive ease  ;  but  to  put  it  on  his  shoulder  and  carry  it  a 
mile  would  be  quite  a  different  thing.  A  farmer  can  easily 
get  rid  of  the  rats  in  his  wheat  stack  by  setting  fire  to  it  ; 
but  such  a  course  would  add  to  the  numerous  cases  in 
which  the  remedy  is  worse  than  the  disease.  Numberless 
examples  might  be  given  to  show  that  it  is  not  always  the 
result  accomplished  which  makes  a  hardship,  but  the  manner 
in  which  that  result  has  been  reached. 

Instead  of  assuming  that  social  and  industrial  derange- 
ment is  inevitable,  and  resigning  ourselves  like  fatalists, 
we  should  remember  that  such  an  event  is  always  the 
result  of  some  form  of  ignorance,  and  set  to  work  to 
find  out  what  it  is  and  how  to  apply  a  remedy.  It  is  easy 
to  deceive  ourselves  with  the  pleasant  belief  that  our  knowl- 
edge is  perfect  and  that  our  misfortunes  have  not  arisen 
from  our  own  folly. 


CHAPTER  VIII. 

Value;  a  Clear  Understanding  of  its  Nature  Indispensable. — How  to 
Study  Value. — Location  apparently  affects  Value. — Creation  of  Value 
by  Transportation. — Effect  of  Time  in  Creating  Value.— "Difference 
between  Value  and  Weight  and  Measure. — Change  of  Place  not  the 
Real  Cause  of  Changes  in  Value. — Men  change  Values  by  Time, 
Place  and  Mode  of  Sale. — A  Merchant's  Success. — The  Essence  of 
Value. — Intrinsic  Value. — Changes  in  Value  in  Consequence  of 
Changes  in  Circumstances.— The  Result  which  Creates  Value. — Un- 
usual Values. — Value  of  Water. — Changes  of  Value  are  always 
wrought  by  the  same  Law. — How  Value  is  Diminished. — How  Value 
is  Increased. — What  gives  Stability  to  Values. — Common  Idea  of  the 
Cause  of  Value. — Why  Land  has  Risen  in  Value. — Why  Personal 
Property  changes  in  Value. — Effect  of  Law  on  the  Value  of  Gold  and 
Silver. — Things  do  not  possess  Two  Values. — Exchangeable  Value. 
— Final  Analysis  of  the  Nature  of  Value.— Different  Amounts  ot 
Value  Created  by  the  Same  Amount  of  Labor. — Why  Labor  does  not 
Always  Create  Wealth. — How  We  state  Value. — Distinction  between 
Value  and  Inherent  Qualities. — Value  not  an  Intrinsic  Quality. — Leg- 
islation has  no  Effect  on  Intrinsic  Qualities. — -A  Prolific  Error. — - 
What  is  Necessary  to  the  Existence  of  Value. — Value  is  always  Re- 
lation.— Only  one  Way  to  learn  the  Nature  of  Value. 

Value  is  not  a  quality ;  it  is  a  result  of  ciremnstances. 
WJien  a  person  with  a  certain  zvant  is  placed  in  possession  of  a 
tiling  ivhose  intrinsic  qualities  meet,  gratify  and  fill  said 
zvajit,  value  is  created.  The  degree,  the  aiiiount,  of  value  thus 
evoked  depends  on  the  intensity  and  importance  of  the  want 
and  the  difficulty  of  otherivise  supplying  it. 

The  difificulty  which  obstructs  progress  in  studying  polit- 
ical economy  is  similar  to  that  met  in  the  study  of  all  other 
subjects.  .It  is  more  or  less  impossible  to  fully  understand 
one  branch  of  any  subject  until  all  other  portions  of  that 
subject  have  been  mastered  so  that  the  relation  of  one  thing 
to  another  can  be  surveyed  at  a  glance.  As  only  one  thing 
can  be  learned  at  a  time,  we  have  no  alternative  but  to  first 
study  the  different  parts  of  a  subject  separately,  and  then 

146 


NEED  OF  KNOWIiYG   WHAT  VALUE  IS. 


147 


turn  back  and  pass  the  whole  ground  over  again  with  the 
help  of  the  light  afforded  by  the  preliminary  process  of 
studying  one  portion  after  another.  Thus  it  is  impossible 
to  comprehend  any  social  problems  fully  without  a  clear 
understanding  of  what  is  described  by  the  term  "  value." 
But  "  value  "  can  only  be  fully  understood  by  a  person 
familiar  with  the  motives  which  lead  men  to  exchange 
things  with  each  other,  and  the  mode  in  which  these  ex- 
changes are  made. 

That  the  nature  and  attributes  of  value  be  correctly  un- 
derstood is  of  the  utmost  importance,  because  every  portion 
of  the  topics  we  are  considering  has  a  direct  relation  to 
value.  A  work  on  political  economy  might  truly  be  enti- 
tled :  "  A  description  of  the  laws  which  regulate  the  crea- 
tion and  distribution  of  value."  The  definition  of  value 
therefore  describes  fundamental  facts  and  principles.  The 
greater  portion  of  all  financial  theories  and  systems  must 
consequently  hinge  on  the  manner  in  which  it  is  understood 
that  value  can  be  created  or  destroyed,  and  on  what  the  es- 
sence of  value  itself  is  believed  to  be. 

HOW   TO   STUDY   VALUE. 

Heretofore  we  have  partially  considered  the  nature  of 
value.  Let  us  now  carefully  dissect  the  meaning  of  the 
word  "  value,"  and  see  if  we  can  definitely  and  fully  ascer- 
tain precisely  what  value  is,  and  what  it  is  made  of. 

The  word  "  valuable  "  is  an  adjective  which  is  placed  be- 
fore names  to  denote  that  a  designated  thing  possesses  util- 
ity, worth,  usefulness,  or  the  power  to  gratify  and  satisfy 
fancied  and  actual  necessities  and  desires.  Thus  we  say:  a 
valuable  farm,  a  valuable  cow,  a  valuable  coat,  a  valuable 
house  ;  thereby  meaning  to  convey  the  idea  that  the  named 
things  possess  qualities  which  render  their  ownership  desir- 
able,— that  they  are  forms  and  kinds  of  wealth.  The  term 
valuable  literally  means  something  which  contains,  brings 
or  represents  value.  We  now  wish  to  find  out  just  what  the 
thing  itself  is  which  valuable  goods  and  valuable  property 
contain  or  possess.     We  cannot  discover  it  by  sight,  nor  by 


148 


SOCIAL  STRUGGLES. 


any  other  one  of  the  senses ;  neither  can  we  learn  anything 
about  value  by  breaking  a  valuable  thing  in  pieces,  or  by 
subjecting  it  to  any  chemical  test.  But  the  failure  of  such 
tests  to  reveal  the  nature  of  value  does  not  prove  that  it  has 
no  existence,  because  we  know  that  the  nature  of  many 
other  things  cannot  be  so  determined,  but  must  be  ascer- 
tained by  comparative  reasoning.  Therefore  we  are  forced 
to  study  this  invisible  thing  by  reasoning  from  facts  which 
we  know  have  a  relation  to  it. 

LOCATION  APPARENTLY  AFFECTS  VALUE. 

In  beginning  this  investigation,  the  first  thing  which  at- 
tracts our  attention  is  the  fact  that  the  same  thing  has  a  dif- 
ferent value  in  different  places.  In  some  things  the  differ- 
ence in  their  value  caused  by  locality  is  comparatively 
small, — in  other  things  very  great. 

Between  these  two  extremes  there  is  every  gradation  ; 
but,  in  everything  whatever,  we  invariably  find  that  the 
same  thing  in  one  country  has  some  degree  of  difference  in 
value  from  what  it  has  in  another.  These  differences  are 
most  noticeable  in  proportion  to  the  distance  of  one  place 
from  another,  and  the  contrast  between  the  surroundings, 
wealth,  habits,  occupations  and  industrial  and  mental  devel- 
opment of  the  inhabitants  of  those  places.  Thus  we  find 
that  the  same  things  which  have  little  value  in  South  Amer- 
ica, Asia  and  Africa  are  considered  much  more  valuable  in 
London,  Paris,  or  New  York.  On  the  other  hand,  we  find 
that  many  things  become  much  more  valuable  if  taken  from 
the  world's  great  centers  of  wealth  and  transported  to  other 
climes  and  nations.  Furthermore,  we  observe  great  differ- 
ences in  the  value  of  the  same  things  in  the  same  country  ; 
some  things  being  frequently  worth  several  times  as  much 
in  one  place  as  in  another.  Even  where  places  are  within 
fifty  miles  of  each  other,  we  often  find  that  a  thing  has  one 
value  at  one  place,  and  another,  and  a  very  different  value, 
at  another  place. 

Furthermore,  we  observe  that  a  considerable  number  of 


CHANGE  OF  PLACE— CHANGE  OF  VALUE.  j^g 

things  are   of  no  value  in  one  location,  and  of  considerable 
value  when  removed  to  another  spot. 

A  ship's  crew,  ice-bound  in  the  Arctic  seas  and  certain  of 
being  obliged  to  remain  there  for  several  months,  would  not, 
if  they  could,  sell  their  stock  of  coal  for  one  thousand  dol- 
lars a  ton.  Near  the  ship  may  lie  a  mountain  of  ice  which 
is  of  no  value  whatever  to  them.  But  change  the  conditions 
and  relative  position  in  which  both  coal  and  ice  are  sit- 
uated,— place  them  both  in  New  Orleans.  The  crew  would 
then  be  willing  to  sell  their  coal  for  a  comparatively  small 
price',  while  the  ice  would  become  very  valuable. 

CREATION  OF  VALUE  BY  TRANSPORTATION. 

Having  become  convinced  that  changes  in  the  location, 
surroundings  and  conditions  under  which  things  are  placed 
alter  their  values  more  or  less,  we  naturally  ask  :  If  the 
value  of  a  thing  can  be  enhanced  by  changing  its  location 
and  surroundings,  does  not  such  a  change  actually  create 
value?  If  coal  which  is  worth  only  one  dollar  a  ton  at  the 
mines  be  taken  to  a  place  where  it  is  worth  five  dollars  a  ton, 
have  not  four-fifths  of  the  value  of  that  coal  been  created 
by  placing  it  under  different  conditions?  Reflection  on 
the  above  and  kindred  questions  compels  us  to  answer 
them  in  the  afifirmative. 

But  our  curiosity  is  excited,  and  we  are  impelled  to  ask:' 
If  value  can  be  created  by  changing  the  location  and  cir- 
cumstances in  which  things  are  placed,  why  do  not  men 
who  desire  gain  engage  in  the  business  of  moving  goods 
from  place  to  place  in  such  manner  that  a  material  change 
will  be  wrought  in  the  conditions  which  environ  them  and 
thus  enhance  the  value  of  those  goods?  The  more  we  re- 
flect upon  this  question,  the  more  feasible  such  a  scheme 
appears ;  when,  lo !  it  dawns  upon  us  that  the  aforesaid 
mode  of  creating  value  and  getting  gain  is  exactly  what  a 
very  considerable  part  of  the  human  race  have  always  been 
industriously  engaged  in. 

At  first,  men  learned  that  more  value  could  be  had  for  the 
few  simple  things  they  had  for  exchange  by  carrying  them 


I50 


SOCIAL  STRUGGLES. 


on  their  backs  over  rude  foot-paths  to  another  tribe  who 
were  not  as  well  supplied  with  those  things  as  themselves. 
In  course  of  time  mankind  had  a  greater  number  and  va- 
riety of  things  for  sale  and  exchange, — they  tamed  animals 
and  made  paths  suitable  for  beasts  of  burden  to  travel  over, 
and  then  the  business  of  making  things  more  valuable  by 
moving  them  from  one  place  to  another  became  more 
extended  and  important.  Progress  went  slowly  on. 
Wheeled  vehicles  were  invented,  and  then  the  need  of  bet- 
ter roads  over  which  to  draw  loads  of  goods  from  one  place, 
where  cheap,  to  another  place,  where  more  valuable,  be- 
came more  obvious  and  imperative  ;  roads  were  made  better 
and  in  greater  numbers  ;  hills  were  cut  down,  morasses 
filled,  streams  bridged,  and  ail  the  cultivated  lands  and 
cities  placed  in  easy  communication  by  earth  roads. 

But  this  did  not  satisfy  the  desires  of  shippers  of  goods. 
Within  a  century,  a  new  instrumentality  has  been  invented 
whereby  the  value  of  things  can  be  enhanced  by  cheaply 
and  rapidly  transporting  them  any  distance  required.  The 
railroad  and  the  steam  locomotive  now  connect  all  the 
commercial  and  industrial  centers  in  this  country,  and  in 
each  nation  of  Europe,  by  tens  of  thousands  of  miles  of 
road  ;  and  even  in  Asia  and  South  America  an  immense 
length  of  railroad  is  in  operation. 

The  postal  service,  the  telegraph,  huge  warehouses  equip- 
ped with  hoisting  machines,  steam-engines,  ponderous 
trucks  drawn  by  powerful  horses,  and  a  variety  of  other 
potent  aids  to  the  work  of  creating  value  by  the  transporta- 
tion of  goods  are  in  constant  use. 

We  also  find  that  the  carriage  of  goods  by  water  has 
passed  through  the  same  stages  of  growth  as  land  trans- 
portation. Instead  of  timidly  creeping  along  the  shores  in 
little  boats  as  our  ancestors  did,  we  now  place  the  goods 
which  are  cheap  in  one  continent  on  board  a  huge  ship  and 
steer  straight  across  the  ocean  to  another  continent,  where 
we  know  the  same  things  have  a  greater  value.  We  have 
dug  canals,  built  docks,  lined   the   ocean   shores  with   light- 


MAN  HAS  ALWA  YS  BEEN  A   TRANSPORTER. 


151 


houses,  and  dotted  every  sea  with  sails  and  with  the  trailing 
smoke  of  steamers. 

From  the  time  when  a  few  skins  or  other  simple  commod- 
ities were  carried  in  rude  canoes,  or  on  the  backs  of  men 
or  beasts,  from  one  place  to  another,  for  the  purpose  of  in- 
creasing their  value,  down  to  the  present,  when  an  enor- 
mous net-work  of  organized  commerce  is  spread  over  the 
world,  we  find  in  every  period  a  universal  and  practical  be- 
lief that  under  certain  conditions  the  value  of  things 
can  be  raised  by  transporting  them  from  one  market  to 
another. 

A  large  portion  of  history,  the  story  of  man's  efforts  to 
satisfy  his  wants  and  gratify  his  desires,  is  merely  a  record 
of  inventions  and  attempts  made  for  the  purpose  of  creating 
or  discovering  some  means  or  route  whereby  the  location 
and  surroundings  of  goods  could  be  more  easily  changed, 
and  the  creation  of  value  and  the  acquisition  of  gain  more 
readily  and  certainly  accomplished. 

Only  a  short  time  has  elapsed  since,  at  great  cost,  the 
Suez  Canal  was  completed,  for  the  sole  purpose  of  making  a 
means  whereby  the  location  of  goods  in  Asia  and  Europe 
could  be  more  easily  changed.  At  enormous  expense  a 
canal  is  now  being  built  across  the  Isthmus  of  Panama. 
This,  like  great  numbers  of  other  works,  is  simply  a  step 
whereby  the  creation  or  increase  ot  value  by  moving  goods 
from  place  to  place  can  be  effected  with  less  difficulty. 

In  some  cases  we  find  a  change  in  the  locality  of  a  thing 
affects  its  value  comparatively  little  ;  in  other  instances, 
the  entire  value  is  dependent  on  its  being  transported  from 
where  nature  placed  it  to  another  spot.  Ice  is  of  no  value 
while  lying  in  northern  waters,  and  of  considerable  value 
when  carried  to  southern  cities.  Immense  quantities  of 
the  finest  building  sand  lies  on  beaches  where  it  is  not 
worth  one  cent  a  ton.  But  if  this  worthless  sand  be  placed 
under  different  conditions  by  being  carried  to  an  inland 
city  where  sand  is  scarce  it  becomes  quite  valuable.  Coal, 
iron,  building-stone  and  many  other  things  are  almost  with- 
out value  when  lying  in  their  natural  beds,  but  become  of 


152 


SOCIAL  STRUGGLES. 


great  value  when  their  relations  to  mankind  are  changed 
by  transportation  to  a  place  where  a  greater  number  of 
persons  desire  to  own  and  use  them.  The  emigration  of 
laborers  and  mechanics  from  one  place  to  another  is  due,  to 
a  considerable  extent,  to  the  fact  that  labor,  like  every- 
thing else  which  is  bought  and  sold,  has  different  values  in 
different  countries  ;  and,  even  in  different  portions  of  the 
same  countries,  labor  sells  for  different  prices. 

EFFECT   OF   TIME    IN   CREATING  VALUE. 

We  have  now  seen  that  place  seems  to  be  an  essential  ele- 
ment of  value.  Upon  further  reflection  we  find  that  iime 
is  another  factor  which  apparently  often  largely  determines 
the  value  of  a  given  thing.  Merchants  buy  commodities  at 
one  time  and  keep  them  until  another  time,  when  they  ex- 
pect their  value  will  be  greater.  Dealers  in  real  estate  buy 
land  at  one  time  with  the  idea  of  keeping  it  until  another 
time.  Speculators  in  stocks  and  alt  kinds  of  other  things 
are  continually  basing  their  calculations  on  the  changes 
which  time  will  make  in  the  value  of  whatever  they  are 
dealing  in. 

The  market  reports  of  the  prices  of  grain  are  a  familiar 
illustration  of  this.  Wheat,  for  instance,  is  quoted  at  one 
price  if  to  be  delivered  in  May  ,  and  at  a  different  rate  if  to 
be  delivered  in  October  of  the  same  year.  The  price  of 
labor  varies  in  the  same  place  at  different  seasons  of  the 
year.  This  is  especially  noticeable  in  farming  regions. 
Laborers  get  much  higher  prices  in  harvest  time,  for  the 
same  amount  of  exertion,  than  at  other  portions  of  the  year. 
The  enhanced  wages  are  due  to  the  time  at  which  the  ser- 
vices are  rendered. 

DIFFERENCE   BETWEEN   VALUE   AND   WEIGHT  AND 
MEASURE. 

The  foregoing  considerations  show  .us  that  value  is 
entirely  different  from  weight  and  measure.  An  elephant's 
tusk,  which  is  four  feet  long  and  weighs  twenty  pounds,  will 
be  just  as  long  and  just  as  heavy  no  matter  to  what  part  of 


CHANGE  OF  PLACE  CAJV  DESTROY  VALUE.  i  r  •, 

the  world  we  carry  it.  But  its  value  will  depend  on  the  cir- 
cumstances in  which  it  is  placed.  Neither  time  nor  place 
affect  the  weight  and  measure  of  a  thing  ;  those  qualities 
cannot  be  changed  without  essentially  changing  the  thing 
itself.  But  the  value  of  a  thing  can  be  raised  to  several 
times  its  original  price,  and  afterward  reduced  to  nothing, 
without  changing  its  material  qualities  in  the  slightest  de- 
gree. 

S  has  a  thousand  loads  of  paving-stones  piled  up  in  a 
city,  where  they  are  worth  two  thousand  dollars.  They 
were  brought  there  from  a  stony  farm,  where  they  were 
worthless.  If  S  send  these  stones  to  a  place  where  no  one 
wants  them,  their  value  is  gone  ;  but  they  will  weigh  and 
measure  just  as  much  as  ever. 

CHANGE    OF    PLACE   NOT   THE  REAL   CAUSE   OF   CHANGES 
IN   VALUE.  ■ 

The  last  example  illustrates  another  important  fact ;  viz., 
while  place  is  usually  the  apparent  reason  why  a  thing 
which  is  shipped  from  one  point  to  another  is  raised  or 
lowered  in  value  it  is  never  the  real  reason.  If  it  were,  a 
movement  of  things  from  one  place  to  another  would  al- 
ways alter  their  value.  But  such  is  not  the  fact.  Coal 
might  be  taken  from  the  mines  of  one  country  and  brought 
thousands  of  miles  to  the  coal  mines  of  another  country, 
without  having  its  value  altered  by  such  a  change. 

What  is  true  of  place  is  also  true  of  time :  it  is  often  the 
apparent,  but  never  the  real  reason  for  a  change  in  the 
value  of  a  thing.  A  thing  may  have  the  same  value  on 
dates  separated  by  months  or  years. 

The  actual  reasons  which  change  values  are  alterations  in 
the  conditions  under  which  a  thing  is  placed, — changes  in 
the  relation  which  it  bears  to  mankind  and  to  surrounding 
things,  facts  and  circumstances.  Time  and  place  are  merely 
instrumentalities  which  are  often  used  to  produce  those 
changed  conditions,  and  place  a  certain  thing  under  circum- 
stances, or  in  a  location  where  it  will  be  in  greater  demand. 


154  SOCIAL  STRUGGLES. 

and  therefore  have  a  greater  value  because  its  relative  im- 
portance will  be  increased. 

MEN   CHANGE   VALUES   BY   TIME,    PLACE   AND    MODE 
OF   SALE. 

The  dealer  in  stocks  says  to  himself  :  "  At  this  time,  stocks 
are  low  because  money  is  difficult  to  obtain,  and  the  major- 
ity of  persons  are  frightened.  I  will  buy  now  and  hold  my 
stocks  until  the  business  outlook  has  altered — until  money 
is  plentier  and  the  community  full  of  hope.  I  will  buy 
in  a  market  clouded  by  general  distrust  ;  I  will  sell  under 
different  circumstances.  Time  will  bring  these  changes 
about."  The  dealer  in  land  acts  from  reasoning  akin  to  that 
of  the  stock  dealer,  and  thus  concludes  : 

"  The  land  which  forms  Manhattan  Island  is  substantially  the  same 
land  that  it  was  two  hundred  and  fifty  years  ago  when  it  had  very  little 
value,  but  the  surroundings  of  this  island  have  so  changed  as  make 
it,  at  the  present  time,  of  great  value.  A  change  in  the  population  and 
wealth  of  a  city  changes  the  value  of  the  land  within  it.  Here  is  a  tract 
of  land  w^hich  is  hqiv  within  one  mile  of  the  center  of  a  city  of  twenty 
thousand  inhabitants  ;  within  ten  years  it  will  be  within  one  mile  of  the 
center  of  a  city  of  forty  thousand.  The  change  which  the  circumstances 
surrounding  this  land  will  undergo  must  produce  an  effect  on  its  value  in 
moderate  degree,  similar  to  the  effect  which  the  growth  of  New  York 
has  had  on  New  York  land.  By  buying  now,  I  will  be  paying  iox  present 
conditions.  By  keeping  it  ten  years,  I  can  then  sell  it  under  other  con- 
ditions which  will  create  a  far  larger  value." 

The  dealer  in  coffee  says  :  "  Coffee  is  worth  so  much  in 
New  York  and' so  much  in  Rio  Janeiro.  A  handsome  prof- 
it can  be  made  by  purchasing  coffee  in  Rio  Janeiro  and 
carrying  it  to  a  different  market,  to  a  place  where  there  is 
less  coffee  and  more  persons  who  want  it." 

Trains  of  reasoning  similar  to  those  aforesaid  are  em- 
ployed by  all  dealers  who  intelligently  conduct  their  busi- 
ness. The  transportation  of  goods  from  place  to  place, 
like  the  buying  of  things  at  one  time  for  the  purpose  of 
selling  them  at  another,  are  merely  agencies  through  which 
certain  results  are  expected  to  follow.  All  dealers  endeavor 
to  make  a  profit   by  purchasing  certain  things  in  a  market 


WHAT  A   TRADER'S  SUCCESS  DEPENDS  ON. 


155 


where  the  conditions  tend  to  produce  a  low  price,  and  then, 
by  the  aid  of  time,  distance,  or  a  mode  of  sale  different  from 
that  by  which  the  purchase  was  made,  bring  these  same 
things  to  a  different  market,  to  a  market  where  the  condi- 
tions will  be  likely  to  give  them  a  greater  value. 

At  first  sight,  it  appears  as  if  the  great  majority  of  shop- 
keepers got  their  profits  without  enhancing  the  value  of  the 
goods  dealt  in  by  making  changes  in  the  conditions  sur- 
rounding those  goods.  But  a  little  examination  shows  that 
these  merchants,  in  essence,  pursue  the  same  course  that  a 
merchant  does  who  buys  in  England  and  sells  in  Mexico. 
They  buy  in  the  wholesale,  and  sell  in  the  retail  market. 
Goods  sold  at  wholesale  are  sold  under  materially  different 
conditions  from  goods  sold  at  retail.  Hence,  goods  bought 
of  a  wholesale  dealer,  and  then  divided  into  small  parcels 
and  sold  at  retail,  have  their  conditions,  and  consequently 
their  value,  considerably  changed.  That  is,  the  value  of 
each  pound,  yard,  or  quart  of  goods  sold  at  retail  is 
greater  to  its  purchaser  than  it  would  be  if  he  were  obliged 
to  buy  a  large  amount  of  the  same  thing.  This  is  so  be- 
cause the  portion  bought  supplies  the  customer's  wants, — 
it  is  adapted  to  his  condition  and  circumstances,  and  there- 
fore has  a  greater  relative  value  to  him  than  a  large  amount 
of  the  same  thing  would  have. 

All  mercantile  and  commercial  transactions  are  con- 
ducted on  the  principle  of  changing,  in  some  form  or 
way,  the  conditions  and  circumstances  of  the  property 
dealt  in.  These  changes  are  created,  or  are  expected  to 
occur,  by  and  from  a  great  variety  of  means  and  methods. 
But  the  principle  underlying  them  is  always  the  same. 

A  merchant's  success. 

Leaving  out  of  view  the  fortuitous  events  which  are 
usually  called  "  luck,"  the  success  of  these  endeavors  de- 
pends on  the  accuracy  and  breadth  of  the  merchant's 
knowledge,  the  soundness  of  his  judgment,  his  pecuniary 
resources,  the  amount  of  trust  reposed  in  him  by  owners 
of    property,  his  alertness  in  seizing  opportunities,  and  his 


156 


SOCIAL  STRUGGLES. 


skill  in  conducting  the  practical  details  of  the  enterprises 
he  may  engage  in,  and  advantageously  changing  the  con- 
ditions surrounding  his  goods. 

THE   ESSENCE   OF   VALUE. 

We  nave  now  learned  that  all  mankind,  practically  if  not 
theoretically,  agree  that  the  value  of  things  is  largely  depend- 
ent on  the  conditions  under  which  they  are  placed.  Further- 
more, we  have  found  that  value  can  be  created,  increased, 
diminished,  or  destroyed  without  making  the  slightest  mate- 
rial alteration  in  the  thing  which  contains  or  possesses  it, 
simply  by  changing  the  relation  of  a  thing  to  mankind,  and 
the  attendant  facts  and  circumstances.  But  we  have  not 
yet  found  what  is  meant  by  the  word  "value,"  nor  what  it 
essentially  consists  of.  As  neither  physical  nor  chemical 
examination  will  reveal  anything,  we  are  forced  to  continue 
to  analyze  it  by  reasoning  from  known  facts.  We  must 
follow  the  same  method  we  use  when  considering  the  nature 
of  "  justice,"  or  any  other  thing  which  cannot  be  weighed, 
measured,  and  handled. 

Having  learned  that  altered  circumstances  create  changes 
in  the  amount  of  value  which  a  given  thing  possesses, 
the  next  natural  step  is  to  inquire  whether  value  ever 
exists  absolutely,  without  any  dependence  whatever  on 
circumstances.  If  it  be  possible  for  anything  or  things  to 
contain  or  possess  absolute  value,  then  that  or  those  things 
will  always  be  prized  highly,  sought  for  and  considered 
desirable  and  valuable  by  one  man,  or  by  a  hundred  men, 
no  matter  what  the  situation,  condition  and  circumstances 
of  that  man  or  those  men  may  be. 

INTRINSIC   VALUE. 

The  question  consequently  arises  :  Are  there  any  things 
which  are  valuable  to  a  man  at  all  times  and  under  all 
circumstances?  If  so,  then  those  things  are  not  dependent 
on  any  circumstances,  facts  or  conditions  whatsoever  in 
order  to  be  valuable,  but  they  actually  contain  and  possess 
absolute,  intrinsic  and  unchangeable  value.     Furthermore, 


WHAT  INTRINSIC  VALUE  WOULD  BE. 


157 


the  possessor  of  those  things,  under  all  circumstances 
and  conditions  whatsoever,  is  better  off  than  if  he  did  not 
possess  them. 

But,  if  no  such  things  can  be  found,  then  it  necessarily 
follows  that  value  is  dependent  entirely  on,  and  is  the 
creature  of  circumstances  and  conditions. 

In  commencing  to  search  for  a  thing  which  contains 
intrinsic  value  we  naturally  turn  first  to  those  things  which 
are  usually  considered  most  valuable  ;  viz.,  gold,  silver 
and  diamonds.  At  the  outset  we  find  a  universal  testi- 
mony that  the  ownership  of  those  things  is  usually  deemed 
so  desirable  that  mankind  often  voluntarily  undergo  great 
labors  and  privations  to  obtain  it.  But  our  search  is  not 
for  something  which  generally  and  under  ordinary  con- 
ditions has  value,  but  for  something  which  invariably  has 
value.  The  question  whether  gold,  silver  and  diamonds 
possess  intrinsic  value  can  therefore  only  be  solved  by  an 
answer  to  a  kindred  question  :  Can  a  man  be  placed  under 
circumstances  in  which  those  things  are  of  no  value  to 
him  whatever?  Does  not  their  ownership  always  bring  the 
benefits  derived  from  the  favorable  conditions  described 
and  conveyed  by  the  term  "  wealth  "  ? 

CHANGES    IN    VALUE    IN     CONSEQUENCE     OF     CHANGES     IN 
CIRCUMSTANCES. 

The  slightest  reflection  shows  that  a  great  variety  of 
conditions  are  possible,  and  often  exist,  which  render 
those  things  of  no  value  whatever  to  a  man,  simply  be- 
cause under  such  circumstances  he  cannot  derive  any 
benefit  or  advantage  from  owning  them.  Suppose  a  man 
has  in  possession  a  large  amount  of  silver,  gold  and 
diamopds,  and  at  the  same  time  is  suffering  from,  and  in 
danger  of  perishing  of  thirst,  of  starvation,  of  cold,  or  of 
wounds  or  disease.  Further  suppose,  as  not  infrequently 
happens,  that  his  surroundings  and  condition  are  such 
that  he  is  utterly  unable  to  exchange  his  goods  for  the 
things  which  will  supply  his  necessities  or  relieve  his 
sufferings.      Is    it    not   evident     that    those     things    would 


158 


SOCIAL  STRUGGLES. 


then  be  of  no  value  whatever  to  their  owner?  Remote 
from  aid,  men  occasionally  perish  of  thirst,  cold  and  star- 
vation, which  the  possession  of  millions  at  the  time  would 
not  have  averted.  All  around  us  rich  men  are  constantly 
falling-  into  conditions  in  which  what  was  their  wealth  loses 
all  value  to  them.  They  are  in  a  condition  similar  to 
that  of  a  man  perishing  of  thirst  in  the  desert,  sitting  on 
a  pile  of  gold  and  diamonds,  with  no  possibility  of  succor. 
They  are  dying  of  disease,  and  all  the  things  in  the  world 
usually  called  "  valuable "  are  of  no  value  to  them,  from 
the  simple  fact  that  their  ownership  does  not  supply 
imperative  wants  and  desires. 

Some  persons  may  say  that  the  aforesaid  examples  are  ex- 
treme cases,  and  therefore  do  not  truly  represent  the  facts. 
But  it  must  be  remembered  that  the  existence  of  a  law  is 
not  disproved,  or  affected  in  the  slightest  degree,  by 
showing  that  the  results  of  its  workings  are  often  un- 
noticed. The  fall  of  a  feather  attracts  little  attention ; 
the  fall  of  a  thousand  tons  a  great  distance  creates  a 
vivid  impression  on  the  beholder.  But  both  these  events 
are  due  to  precisely  the  same  cause, — the  law  of  gravita- 
tion. Natural  laws  are  universal  and  perpetual.  They  do 
not  apply  to  one  class  of  cases,  and,  at  the  same  time,  have 
no  operation  or  effect  in  precisely  similar  circumstances. 
The  law  which  governs  value  does  not  differ  in  the  least 
from  the  laws  which  relate  to  all  other  subjects  and  things  : 
it  is  universal  and  perpetual  ;  it  regulates  all  gradations  of 
value,  from  the  lowest  to  the  highest,  and  it  operates  just  as 
inevitably  and  effectually  in  ordinary  cases,  which  do  not 
attract  general  attention,  as  it  does  where  striking  results 
are  produced. 

If  we  are  compelled  to  admit  that  gold,  silver  and  dia- 
monds have  no  intrinsic  value — that  is,  no  value  independent 
of  certain  conditions  which  are  requisite  to  confer  value 
upon  them — we  still  find  it  hard  to  believe  that  the  value  of 
all  things  is  due  to  outside  influences  instead  of  to  something 
inside  of  them.     In  other  words,  we  have  difficulty  in  be- 


VALUE  IS  CREATED  BY  CIRCUMSTANCES. 


159 


lieving  that  a  universal  law  decrees  that  all  value  is  extrinsic 
and  not  intrinsic. 

Consequently  we  ask  :  Have  not  bread,  meat  and  kindred 
ne'cessities  intrinsic  value  to  a  man  ?  Are  they  not  always 
useful  and  therefore  valuable  without  the  slightest  regard 
to  circumstances  ?  Is  not  wheat,  for  instance,  a  synonym 
for  value  because  it  actually  contains  valuable  nourishment? 

After  carefully  pondering  on  the  above  crucial  test  ques- 
tions we  are  compelled  to  answer  in  the  negative,  from  the 
simple  fact  that  a  man  maybe  in  a  condition  in  which  those 
things  are  of  no  use  to  him.  A  thing  is  of  absolute  value  to 
a  man  only  when  the  attendant  circumstances  are  such  as'to 
create  a  coincidence  between  the  wants  of  the  man  and  the 
peculiar  qualities  of  the  thing.  To  a  man  suffering  from  ex- 
cessive heat,  a  cool  place  and  abundance  of  cool  drinks  are 
of  value  ;  but  if  a  person  is  shivering  with  cold  his  ideas  of 
value  are  warm  clothing,  shelter  from  the  cold  wind,  fuel 
and  warm  drink  and  food.  Large  sums  are  continually  be- 
ing paid  to  musicians,  but  a  person  with  a  dislocated  arm 
would  not  be  in  the  mood  to  attach  any  value  to  an  opera 
ticket  :  he  would  think  a  surgeon's  services  of  more  value 
than  the  melody  of  the  finest  musicians  in  the  world. 

A  coat  would  not  be  of  as  much  value  to  a  barefooted 
man,  well  clad  in  other  respects,  as  a  pair  of  shoes.  Un- 
commonly warm  clothing  is  of  great  value  to  a  person  in  the 
Arctic  regions.  Except  during  a  few  days  in  the  year,  cloth- 
ing suitable  for  the  Polar  region  is  of  no  value  to  a  man  living 
in  the  temperate  zone  ;  and,  to  an  inhabitant  of  the  tropics, 
such  clothing  is  worthless,  unless  possibly  he  can  ship  it  to 
a  cold  country.  Thus  we  see  that  the  value  of  clothing  de- 
pends on  its  meeting  and  supplying  the  wants  of  its  owner  ; 
and  the  amount  of  this  value  depends  largely  on  the  extent 
and  completeness  with  which  an  imperative  need  is  supplied. 

THE  RESULT  WHICH   CREATES  VALUE. 

Illustrations  similar  to  the  above  might  be  given  indefi- 
nitely, all  tending  to  show  that  value  is  created  only  by  the 
meeting-  of  a  ivant  with  a  means  of  supplying  it.     The  value 


l6o  SOCIAL  STRUGGLES. 

of  a  thing  is  consequently  determined  by  the  degree  in  which 
it  supplies  a  want.  Therefore,  of  necessity,  nothing  can 
have  inherent,  intrinsic  value  ;  the  value  of  a  thing  is  only 
called  into  existence  by  a  combination  of  conditions  and 
circumstances  which  enables  and  causes  that  thing  to  supply 
a  want. 

UNUSUAL  VALUES. 

Ordinary  conditions  produce  an  ordinary  amount  of  value 
in  a  giveh- thing.  Extraordinary  conditions  may  change  the 
usual  value  of  a  thing  to  an  extraordinary  state,  and  this 
change  may  be  either  an  entire  creation,  an  increase,  a 
diminution,  or  a  total  destruction  of  its  value.  These  ex- 
traordinary values  seem  wonderful  to  us,  but  an  examin- 
ation of  the  matter  shows  that  no  new  laws  or  mysteri- 
ous forces  have  produced  them.  They  are  created  by 
precisely  the  same  laws  which  give  an  ordinary  value  to  a 
thing  under  ordinary  circumstances.  A  gentle  breeze  is 
caused  by  the  same  laws  which  create  tornadoes ; — the  dif- 
ference between  them  arises  from  different  combinations  of 
facts  under  which  those  laws  set  the  air  in  motion.  When 
the  result  of  a  law's  operation  attracts  our  attention  vividly, 
we  usually  forget  that  those  marked  effects  are  simply  an 
exhibition  of  forces  constantly  at  Avork  under  different  cir- 
cumstances and  then  almost  unnoticed.  We  are  not  much 
impressed  by  stroking  a  cat  in  the  dark  and  watching  the 
electric  sparks  from  her  fur ;  but  the  same  electrical  law  is 
then  in  force  as  when  the  heavens  are  shaken  with  thunder 
and  lightning. 

VALUE   OF   WATER. 

The  foregoing  statements  may  be  exemplified  by  reference 
to  the  value  of  water  pure  enough  for  drinking  and  other 
domestic  purposes.  Under  ordinary  circumstances,  water 
has  but  little  value, — a  small  sum  of  money,  or  a  small 
amount  of  labor,  will  procure  all  that  is  requisite  for  the 
constant  supply  of  a  family.  But  events  often  occur  which 
render  a  small  amount  of  water  of  great  value  ;  the  price  of  a 


WHEN  WATER  IS  VALUABLE.  l6l 

gallon  of  water  under  some  circumstances,  if  it  could 
thereby  be  bought,  would  equal  the  entire  wealth  of  the 
purchaser.  From  this  extreme,  there  is  every  gradation  of 
the  value  of  water  down  to  the  point  where  vast  rivers  of  it 
flow  along  where  no  one  even  imagines  that  water  may  have 
value. 

In  a  valley  high  among  Avild  hills  lies  a  small  deep  lake 
fed  by  living  springs  and  streams.  For  centuries  it  has 
lain  there  without  any  inhabitant  of  its  vicinity  dreaming 
that  its  ten  thousand  acres  of  area  were  worth  as  much 
as  ten  acres  of  fertile  land.  But  within  a  few  years  a  city 
has  arisen,  forty  miles  away,  with  no  water  supply  in  its 
neighborhood-  adequate  to  its  present  and  prospective 
needs.  A  few  far-sighted  persons  comprehend  that  a  con- 
dition of  facts  exists  which  sooner  or  later  must  inevitably 
confer  a  great  value  on  the  waters  of  that  lake.  They 
quietly  buy  the  lake,  with  a  large  amount  of  surrounding 
wild  land,  and  then  give  all  the  residents  of  that  city  infor- 
mation that  an  abundance  of  good  water,  at  a  moderate 
cost,  can  be  had  from  it.  A  water  company  is  formed, — ■ 
the  water  is  made  to  supply  the  citizens  with  an  abundance 
of  good  water  at  a  low  charge,  and  a  large  amount  of  value 
is  thereby  created.  A  want  and  a  supply  have  met.  The 
water  which  a  short  time  before  was  considered  of  no  value 
is  now  deemed,  by  careful  capitalists,  a  desirable  kind  of 
property,  because  they  see  no  probability  of  any  circum- 
stances ever  arising  which  will  lessen  the  demand  for  it  and 
the  income  from  its  sale.  No  change  whatever  has  taken 
place  in  the  amount  or  quality  of  the  water.  The  change 
of  value  is  entirely  due  to  the  fact  that  the  relation  of  the 
water  to  mankind  has  been  changed, — a  new  and  entirely 
different  condition  has  been  created — a  new^  use  has  been 
given  to  the  water. 

CHANGES     OF     VALUE     ARE     ALWAYS     WROUGHT     BY     THE 

SAME   LAW. 

There  is  nothing  exceptional  in  the  foregoing  case ;  the 
change  of   value   was  wrought  by  an    unvarying  universal 
II 


|62  SOCIAL  STRUGGLES. 

law  which  operates  precisely  the  same  in  all  cases  without 
the  slightest  reference  to  the  amount  of  attention  its 
results  may  attract.  The  principles  involved  in  the  creation 
of  a  million  dollars'  worth  of  value  are  precisely  the  same  as 
those  which  convert  a  worthless  load  of  sand  into  one  dol- 
lar's worth  of  building  material.  A  certain  change  of  cir- 
cumstances and  facts  must  occur,  and  the  judgment  of  man- 
kind on  the  result  of  that  change  constitutes  what  is  meant 
by  the  word  "  value." 

As  surrounding  conditions  and  the  relation  of  things  to 
mankind  change,  the  judgments  and  estimates  formed  and 
made  of  their  value  must  also  change.  This  explains  the 
changes  which  are  constantly  taking  place  in  the  value  of 
various  things.  The  conditions  and  circumstances  sur- 
rounding them  change,  and  more  or  less  changes  in  value 
occur,  in  proportion  to  the  altered  conditions. 

HOW    VALUE   IS   DIMINISHED. 

A  machine  for  a  given  purpose  may  be  valuable  because 
it  exists  under  conditions  in  which  it  supplies  a  want  far 
better  than  any  other  machine.  But  the  invention  of  a 
better  one  may  wholly  destroy  its  value,  simply  because 
the  new  machine  radically  changes  the  conditions  under 
which  the  old  machine  was  valuable.  In  this  way,  old 
tools  and  machinery  of  various  kinds  are  constantly  being 
made  comparatively  worthless  by  the  invention  of  better 
ones.  A  vast  amount  of  value  in  the  world  now  exists  in 
the  form  of  steam-engines.  But  it  is  not  "  intrinsic  "  value. 
The  discovery  of  a  new  mode  of  generating  force — more 
efficient  and  economical  than  steam,  would  change  the 
present  conditions  under  which  steam-engines  are  valuable 
and  render  them  almost  worthless.  In  like  manner,  the 
value  of  all  other  kinds  of  property  may  be  more  or  less 
diminished  by  inventions  and  events  that  would  change  the 
conditions  which  now  give  them  value.  If  the  value  of  this 
property  were  intrinsic,  no  changes  of  circumstances  would 
or  could  affect  it. 


INCREASED  NEED,  INCREASES  VALUE.  163 

HOW    VALUE   IS   INCREASED. 

On  the  other  hand,  just  as  circumstances  may  diminish 
or  destroy  the  value  of  a  thing,  events  may  increase  its 
value.  Whenever  the  amount  of  a  certain  thing  in  the 
world,  or  at  a  certain  place,  is  limited,  and  it  is  either  very 
difficult  or  impossible  to  create  more  of  it,  then  such  a 
thing  is  largely  enhanced  in  value  by  conditions  which 
increase  the  demand  for  it.  For  example :  the  land  on 
Manhattan  Island  is  limited  in  amount ;  the  growth  of  the 
United  States  has  made  it  the  commercial  center  of  a  great 
nation  ;  an  increased  demand  for  it  and  an  enhanced  value 
are  the  results  of  these  changed  conditions. 

Gold  is  so  limited  by  nature  that  it  is  difficult  to  increase 
its  amount.  The  demonetization  of  silver  by  several  na- 
tions has  increased  the  demand  for  gold.  The  conditions 
under  which  gold  formerly  had  value  have  thus  been  so 
changed  as  to  largely  increase  its  value.  If  the  conditions 
which  make  a  great  demand  for  land  in  New  York  City 
should  so  change  as  to  lessen  that  demand,  the  value  of 
said  land  would  be  diminished.  If  the  conditions  under 
which  gold  is  now  placed  should  be  so  altered  as  to  lessen 
the  demand  for  gold,  its  value  would  thereby  be  dimin- 
ished.* 

*  The  reader  will  here  please  carefully  observe  the  wide  distinction 
between  things  which  can  readily  be  increased  in  amount  proportionately 
to  an  increased  use  of,  and  consequent  increased  demand  for  them,  and 
things  surrounded  by  natural  limitations  which  render  it  practically  im- 
possible for  their  amount  to  be  augmented  nearly  simultaneously  with  an 
augmented  demand  for  them. 

For  example,  if  the  use  of  bricks  throughout  the  nation  should  steadily 
increase  so  that  five  years  hence  the  demand  for  bricks  were  twice  as 
great  as  at  present,  the  price  of  bricks  would  not  materially  rise.  This 
would  be  so,  because  the  materials  from  which  they  are  made  are  practi- 
cally unlimited,  and  by  the  application  of  capital  and  labor  the  supply  of 
bricks  could  and  would  be  so  increased  that  their  value  would  not  mate- 
rially change. 

But  an  increased  demand  for  a  thing  which,  like  gold,  cannot  be  read- 
ily augmented  in  amount  by  an  increased  application  of  labor  to  its  pro- 
duction, must  result  in  an  enhanced  value  of  that  thing. 


164  SOCIAL  STRUGGLES. 

WHAT   GIVES   STABILITY    TO   VALUES. 

Another  matter  of  vast  practical  importance  also  follows 
as  an  inevitable  deduction  from  the  aforesaid  principles, 
viz.:  Stability  of  tJie  value  of  money  and  of  all  othc7'  tJiings 
is  dependent  on  the  stability  of  the  conditions  zahich  ereate 
their  value.  The  majority  of  persons  imagine  there  is  some- 
thing supernatural  in  the  changes  which  occur  in  the  value 
of  money.  But  in  fact  there  is  no  mystery  about  it, — it  is 
dependent  on  altered  conditions  which  produce  altered 
judgments  and  opinions,  and  these  changes  of  condition 
arise  in  the  same  way,  and  from  the  same  causes,  which 
change  the  conditions  of  other  things  ;  that  is,  the  princi- 
ples, the  laws  which  create  those  changes,  are  identical. 

A  merchant  who  wishes  to  estimate  the  value  of  a  thing 
at  a  future  specified  time  will  arrive  at  correct  results,  just 
in  proportion  to  the  accuracy  with  which  he  foresees  the 
circumstances  under  which  that  thing  will  then  be  placed. 
The  failure  of  many  merchants  is  due  to  their  want  of  vigi- 
lance in  studying  the  effect  of  various  industrial  and  politi- 
cal movements,  and  consequently  not  adapting  their  pur- 
chases and  sales  to  the  probable  conditions  of  the  future. 
Unlooked  for  events  often  occur,  and  change  conditions  so 
suddenly  as  to  set  at  naught  the  most  careful  estimates  of 
the  future  value  of  certain  goods.  The  man  whose  goods 
such  events  increase  in  value  is  then  said  to  be  "  in  luck." 
But,  on  the  average,  "  luck  "  falls  to  the  man  who  conducts 
his  business  with  the  most  intelligence,  and  most  carefully 
studies  and  forecasts  the  probable  conditions  which  will  en- 
viron the  goods  he  deals  in. 

COMMON   IDEA   OF  THE   CAUSE   OF   VALUE. 

A  few  -years  ago,  the  Secretary  of  the  United  States 
Treasury  caused  the  following  statement  to  be  printed  : 

"  The  value  of  the  precious  metals  depends,  as  in  the  case  of  all  other 
commodities,  on  certain  inherent  qualities  and  the  cost  of  production." 

This  statement  was  doubtless  the  result  of  consulting  the 


COST  AND  VALUE  NOT  AL  WA  YS  ALIKE.  165 

works  of  the  most  "  learned  economists,"  and  was  pub- 
lished for  the  instruction  of  the  public.  The  reader  will 
observe  one  idea  in  this  statement,  viz.,  that  value  is  always 
the  product  of  two  facts.  First,  the  inherent  qualities  of 
the  thing  itself; — that  is,  its  intrinsic  qualities.  Second, 
the  cost  of  producing  the  valued  thing.  As  this  is  the  gen- 
erally accepted  belief  in  regard  to  the  causes  which  give 
value  to  everything,  let  us  see  if  it  be  true. 

WHY   LAND   HAS   RISEN   IN   VALUE. 

We  will  first  apply  this  idea  of  "  value  "  to  that  which 
forms  a  large  portion  of  the  assessed  valuation  of  every 
portion  of  our  country;  viz.,  real  estate.  This  valuable 
thing  has  changed  enormously  in  value  during  the  past 
century,  as  every  intelligent  person  knows.  What  has 
caused  these  great  changes  in  the  value  of  real  estate?  It 
is  not  due  to  the  cost  of  its  production,  because  it  was  cre- 
ated without  human  agency.  Neither  can  it  be  due  to  its 
inherent,  intrinsic  qualities,  because  those  are  the  same  now 
that  they  were  when  the  land  where  New  York  City  stands 
was  not  worth  a  thousand  dollars.  Thus  we  see  that  said 
statement  utterly  fails  to  explain  the  changes  which  take 
place  in  the  value  of  real  estate. 

WHY    PERSONAL   PROPERTY   CHANGES    IN   VALUE. 

Let  US  next  apply  it  to  personal  property.  If  the  value 
of  wheat  depended  on  its  inherent  qualities  it  would 
always  have  the  same  value,  because  its  inherent  qualities 
are  always  essentially  the  same.  We  see,  then,  that  the 
great  changes  which  occur  in  the  value  of  wheat  happen 
without  any  change  in  the  wheat  itself.  But  does  the  dif- 
ference in  the  cost  of  producing  wheat  account  for  the 
changes  in  its  value  ?  When  we  examine  this  question,  we 
find  that  wheat  is  sometimes  worth  25,  50,  or  even  100  per 
cent,  more  than  it  is  at  other  times,  zvJicn  the  cost  of  its  pro- 
duction is  substantially  iDicJiangcd.  What  is  true  of  M'heat  is 
true  of  all  other  farm  products.  Hops,  for  example,  have 
always   the   same   intrinsic   qualities,  and   the  cost  of  their 


1 66  SOCIAL  STRUGGLES. 

production  varies  but  little.  But  hops  are  sometimes  worth 
ten  times  as  much  as  at  other  times. 

Let  us  next  turn  to  manufactured  goods.  When  their 
quality  is  the  same,  does  the  value  of  such  goods  depend  on 
the  cost  of  producing  them?  If  it  did,  then  the  value  of 
manufactured  goods  would  simply  be  a  reflection  of  the 
cost  of  making  them.  But  that  this  is  not  so  is  proved  by 
the  fact  that  manufacturers  sometimes  get  far  more  than 
the  cost  of  manufacture,  and  make  large  fortunes  as  the  re- 
sult. At  other  times,  goods  are  sold  for  less  than  the  cost 
of  making  them,  and  ruin  comes  to  the  manufacturer. 

The  value  which  a  man  gets  in  payment  for  his  labor 
does  not  depend  solely  on  the  essential  qualities  of  that 
labor.  If  it  did,  the  value  of  a  workman's  services  would 
change  but  little  That  is  but  one  of  several  conditions 
which  determine  his  wages.  Neither  does  the  price  of  a 
man's  labor  depend  on  the  cost  of  his  living,  as  it  may  be 
much  more,  or  much  less. 

The  value  of  all  things  depends  considerably  on  law  and 
fashion.  I  have  known  good  unused  carriage  bodies  which 
cost  $75  a  piece  to  manufacture,  and  the  shape  of  which  had 
become  unfashionable,  sold  for  half  a  dollar  a  piece.  Every 
one  can  recall  similar  cases  wherein  great  fluctuations  in 
value  were  due  solely  to  changes  in  public  opinion  as  to 
what  was  good  taste. 

EFFECT   OF   LAW    ON     THE   VALUE    OF    GOLD   AND    SILVER. 

It  is  a  common  belief  that  law  has  no  influence  on  the 
value  of  gold  and  silver.  But  in  reality  nothing  owes  its 
value  more  to  law  than  those  metals.  The  recent  apparent 
fall  in  the  value  of  silver  is  not  due  to  any  change  in  its 
inherent  qualities,  nor  to  any  alteration  in  the  cost  of  pro- 
ducing it..  The  demand  for  it  has  been  lessened  by  its 
demonetization  in  several  countries.  At  the  same  time 
the  demand  for  gold  has  been  proportionately  increased, 
and  its  value  correspondingly  enhanced.  Suppose  the 
demonetization  of  silver  were  carried  still  further  by  other 
nations  discarding  it  and  using  gold   in  place.     The  inevi- 


VALUE  IS  THE  RESULT  OF  ALL  CONDITIONS. 


T67 


table  result  would  be  a  still  greater  demand  for  gold,  and 
a  less  demand  for  silver.  The  value  of  gold  would  then 
rise  still  higher. 

On  the  other  hand,  suppose  gold  should  be  generally 
demonetized  and  no  longer  be  employed  for  any  purpose 
but  use  in  the  arts.  The  result  would  be  a  diminished  de- 
mand for  gold, — it  would  no  longer  be,  as  now,  the  royal 
metal,  and  its  relative  place  in  commerce  would  be  different 
from  what  it  is  at  present.  Its  inherent  properties  would 
be  unchanged  ;  the  cost  of  its  production  would  not  be 
altered,  but  its  value  would  be  greatly  diminished.  It  would 
be  placed  under  different  circumstances  ;  under  conditions 
which  would  lessen  its  relative  importance. 

Further  examples  and  illustrations  of  the  fact  that  the 
aforesaid  statement  of  the  Secretary  of  the  Treasury  is 
misleading  will  readily  occur  to  whoever  will  scrutinize  it 
properly.  The  plain  facts  in  regard  to  the  value  of  a  thing 
are,  that  its  inherent  qualities  and  the  cost  of  its  produc- 
tion have  more  or  less  influence  in  determining  it.  But 
the  peculiar  qualities  of  a  thing,  and  the  cost  of  making 
another  thing  like  it,  are  only  two  facts,  in  the  midst  of  a 
multitude  of  other  facts,  conditions  and  circumstances, 
which  also  affect  its  value.  These  two  facts  aforesaid  may 
therefore  be,  and  usually  are,  the  dominant  conditions,  or 
they  may  have  little  or  no  influence  on  the  value  of  a  thing 
at  a  given  time  and  place. 

THINGS   DO   NOT   POSSESS   TWO   VALUES. 

Many  persons  suppose  that  things  possess  two  values  : 
an  intrinsic  value  and  an  exchangeable  value.  Much  paper 
has  been  spoiled  in  attempting  to  show  that  two  kinds  of 
value  exist.  These  writers  call  the  utility  of  a  thing  its 
intrinsic,  inherent  value. 

If  a  given  thing  possess  intrinsic,  inherent  value,  it  nec- 
essarily follows  that  the  amount  of  intrinsic  value  in  pos- 
session of  a  man  will  be  multiplied  by  the  dumber  of  those 
things  which  he  owns.  But  this  is  not  the  fact.  A  thing 
possesses  utility  to  a  man  to  the  extent  that  it  supplies  his 


1 68  SOCIAL  STRUGGLES. 

wants,  and  no  farther.  Suppose  a  person  needing  a  pecul- 
iar kind  of  shoes  should  order  a  pair,  and  by  some  mistake 
a  thousand  pairs  were  made.  The  first  pair  would  be  the 
most  valuable  ;  the  second  pair  less  valuable,  because  their 
value  would  depend  on  the  contingency  of  their  owner 
living  long  enough  to  want  them.  The  third  pair  would 
be  still  less  valuable,  and  this  diminution  of  value  would 
continue  until  a  point  was  reached  where  the  shoes  be- 
came worthless. 

A  team  of  two  horses  is  valuable  to  a  man  who  has 
use  for  them.  But  it  does  not  therefore  follow  that  four 
horses  would  have  double  the  value  of  one  pair.  On 
the  contrary,  part  of  them  might  be  a  useless  burden  and 
expense. 

Suppose  a  farmer  needing  a  thousand  gallons  of  water 
daily  for  the  use  of  his  family  and  live  stock  should  dig  in 
his  hillside  for  a  spring.  After  excavating  for  some  dis- 
tance, suppose  a  spring  was  found  which  poured  over  a  hun- 
dred thousand  gallons  daily.  The  water  which  the  farmer 
needed  would  be  of  utility  to  him,  but  the  excess  would  be 
of  no  value  and  might  be  an  injury  to  his  farm.  If  the  cir- 
cumstances and  surroundings  of  the  farmer  were  such  that 
he  could  sell,  or  in  some  way  use  all  of  the  water,  the 
whole  of  it  would  be  valuable  ;  but  this  would  simply  be 
confirmatory  evidence  that  all  values  are  created  by  con- 
ditions. 

The  principle  which  renders  an  addition  to  the  amount 
or  numbers  of  a  certain  thing,  beyond  what  is  needed  by  a 
person  at  a  given  time  and  place,  of  less  and  less  utility  ap- 
plies to  all  things  under  all  circumstances.  This  could  not 
be  so  if  utility  and  value  were  intrinsic  qualities. 

EXCHANGEABLE   VALUE. 

Let  us  now  see  if  there  be  really  any  such  thing  as  "  ex- 
changeable value  "  attached  to  any  substance  whatever. 
If  there  be,  it  follows  that  the  thing  which  actually  pos- 
sesses exchangeable  value  can  always  be  exchanged  for 
another  valuable  thing.     But  this  is  not  the  fact.     A  thing 


WHAT  MAKES  A   THIXG  EXCHAxYGEABLE. 


169 


may  be  exchangeable  at  one  time  and  place  for  a  great  va- 
riety of  other  valuable  things  ;  but  under  different  circum- 
stances the  owner  of  this  same  thing  may  not  be  able  to 
exchange  it  for  a  small  portion  of  food,  drink,  or  any  other 
object  of  desire.  Thus  we  see  that  exchangeable  value  is 
not  an  inherent  quality  of  a  thing.  Whether  a  given  thing 
can  be  exchanged,  at  a  given  time  and  place,  for  one  or 
more  valuable  things,  depends  entirely  on  the  circumstances 
and  attendant  facts. 

The  inherent  qualities  of  a  thing  do  not  necessarily  de- 
termine whether  it  can  be  exchanged  or  not  ;  they  simply 
are  one  out  of  a  great  number  of  other  facts  and  circum- 
stances which  decide  that  question.  A  combination  of 
certain  facts  must  exist  in  order  to  enable  a  man  to  ex- 
change one  thing  for  another,  no  matter  how  desirable  the 
ownership  of  that  thing  is  usually  considered.  Life-pre- 
servers can  ordinarily  be  bought  with  a  little  money  ;  but 
on  a  sinking  ship  it  would  be  impossible  to  buy  one  with 
any  amount  of  money. 

That  a  given  thing  is  often  worth  more  to  one  man  than 
to  another  is  a  fact  of  daily  observation.  This  is  so  be- 
cause the  value  of  a  thing  to  a  man  depends  on  the  use  he 
can  make  of  it,  and  this  depends  on  his  situation  and  cir- 
cumstances. Value  varies  greatly  in  amount  ;  but  its 
changes  in  amount  do  not  change  its  character  and  essen- 
tial qualities.  There  is  no  more  propriety  in  saying  that 
two  kinds  of  value  exist  than  there  would  be  in  saying 
there  were  ten  kinds  of  value. 

Dividing  value  into  two  kinds  is  as  absurd  as  it  would  be 
to  say:  "  There  are  two  kinds  of  weight  :  one  is  the  weight 
that  a  man  can  lift  and  walk  off  with,  the  other  is  a 
weight  that  he  cannot  lift."  The  above  and  kindred  errors 
have  arisen  from  setting  out  to  discuss  value  without  exam- 
ining the  fundamental  facts  and  principles  which  underlie 
the  subject. 

The  considerations  heretofore  stated  shovv  us  that  the 
importance  of  a  certain  thing,  at  a  given  time  and  place, 
depends    entirely  on    its   having  such   a   relation   to   other 


170 


SOCIAL  STRUGGLES. 


things  and  facts  that  it  suppHes  an  actual  or  fancied  human 
npcessity  or  desire.  Furthermore,  it  appears  that  the  word 
"value"  is  simply  an  abbreviated  form  of  stating  the  re- 
sult of  an  exercise  of  human  judgment  as  to  the  extent  to 
which  a  necessity  or  desire  can  be  supplied  by  a  certain 
thing,  at  a  given  time  and  place,  and  the  relative  importance 
of  such  a  supply  in  comparison  with  other  things.  Value  is 
therefore  a  human  opinion  as  to  the  relative  worth  of  a 
thing,  and  what  this  opinion  shall  be  depends  entirely  on 
the  circumstances  and  conditions  under  which  that  opinion 
is  formed. 

Human  judgment  is  liable  to  error,  and  it  frequently 
fails  to  accurately  compare  the  worth  of  one  thing  with 
that  of  another.  Mankind  often  attach  an  undue  value  to 
some  things  and  at  the  same  time  prize  other  things  less 
highly  than  they  should.  At  least,  so  it  appears  when  cent- 
uries of  history  record  their  verdict.  But  however  much 
we  may  regret  that  it  is  often  a  serious  problem  to  know 
what  constitutes  TRUTH,  and  therefore  difficult  to  under- 
stand the  TRUE  value  of  a  thing,  we  have  no  other  means 
of  determining  it, — no  other  standard  of  value,  except 
human  judgment  of  the  relative  benefit,  desirability  and 
importance  of  possessing  one  thing,  under  the  existing  cir- 
cumstances, compared  with  some  other  thing  or  things,  at 
the  same  time  and  place.  As  the  human  mind  is  a 
complex  instrument,  affected  by  a  multitude  of  influences, 
it  necessarily  follows  that  its  conclusions  on  the  value  of  a 
thing  depend  on  the  circumstances  under  which  such 
judgment  is  rendered. 

FINAL  ANALYSIS  OF  THE  NATURE  OF  VALUE. 

Thus,  in  the  last  possible  analysis  of  value,  we  find  it  a 
thought,  a  judgment,  a  perception  of  the  relation  of  things 
to  one  another  and  to  mankind.  Value,  therefore,  is  imma- 
terial, like  all  other  thoughts  and  judgments.  We  can  give 
it  a  symbolic  representation,  but  the  thing  itself  is  as  in- 
tangible as  beauty.  No  one  will  deny  the  existence  of  such 
a  thing  as  beaut)-,  but  no  one  ever  saw   it.     This  is  so  be- 


THE  CREATION  OF  FALUE. 


171 


cause  beauty  Is  a  thought, — it  is  a  mental  perception  of 
color  and  proportion  ;  we  can  make  its  symbols,  but  the 
thing  itself  cannot  be  made,  because  it  is  not  material.  If 
beauty  and  value  were  material  things  we  could  make  them 
out  of  some  substance,  and  then  say :  TJiis  is  beauty  and  tJiis 
is  value.  As  the  facts  are,  the  farthest  we  can  go  is  to  say : 
This  is  beautiful  and  this  is  valuable, — that  is,  these  are  our 
ideas  of  the  qualities  which  representations  of  beauty  and 
value  should  possess,  and  how  they  should  appear. 

DIFFERENT    AMOUNTS   OF  VALUE    CREATED   BY   THE    SAME 
AMOUNT   OF   LABOR. 

Having  found  that  value  is  purely  a  creation  of  circum- 
stances and  conditions,  let  us  now  consider  some  prac- 
tical applications  of  the  foregoing  principles.  The  ma- 
jority of  persons  imagine  that  value  is  the  creation  of  labor, 
and  that  labor  always  creates  value. 

The  fact  is  that  value  is  always  created  by  labor,  but 
labor  does  not  always  create  value.  A  small  amount  of 
labor  sometimes  creates  a  large  amount  of  value.  The  fort- 
unate borer  for  an  oil-well  may  create  more  value  by  one 
week's  labor  than  ten  men  would  ordinarily  create  in  a  life- 
time of  toil. 

On  the  other  hand,  a  large  amount  of  labor  may,  and 
often  does,  produce  but  little  value,  or  it  may  be  expended 
without  creating  a  particle  of  value.  Furthermore,  not 
only  may  labor  fail  to  create  any  value  but  it  may  actually 
destroy  value  which  has  been  previously  created. 

When  labor  changes  circumstances,  facts  and  conditions 
so  that  a  want  and  supply  are  made  to  fit  each  other  just 
as  one  blade  fits  another  and  forms  a  pair  of  scissors,  value 
is  created.  But  the  amount  of  labor  expended  in  bringing 
about  this  condition  and  the  amount  of  value  thereby 
created  vary  enormously ;  thus  showing  that  the  value 
created  is  not  solely  dependent  on  the  labor  expended. 

Suppose  A  and  B  should  each  buy  an  acre  of  land,  of 
equal  fertility,  and  set  to  work  to  convert  their  respective 
lands  into   gardens.     In   doing  so  each    man   performs  an 


172 


SOCIAL  STRUGGLES. 


equal  amount  of  labor,  but  the  product  of  A'sland  is  treble 
the  value  of  that  of  B.  This  arises  from  the  fact  that  A 
knows  under  what  conditions  different  plants  thrive  best. 
He  knows  how  to  prepare  the  soil,  when  to  plant,  and  the 
different  kinds  of  manure  and  cultivation  required  by  differ- 
ent vegetables.  In  short,  he  understands  how  to  apply  his 
labor  so  as  to  place  each  plant  under  the  most  favorable 
conditions  for  growth.  But  B  works  without  full  informa- 
tion of  the  needs  of  his  plants.  Consequently,  B,  with 
the  same  amount  of  exertion,  fails  to  create  the  conditions 
that  A  did,  and  a  smaller  amount  of  value  therefore  re- 
sults from  his  toil. 

When  wheat  is  taken  to  a  market  open  to  the  competi- 
tion of  the  owners  of  wheat  throughout  the  world,  its  value 
is  the  same,  whether  raised  by  hand  labor  on  a  naturally 
poor  soil,  or  raised  by  machinery  on  a  fertile  soil  with  little 
labor.  A  similar  fact  is  true  of  the  value  of  all  other  things. 
If  a  miner  dig  ten  thousand  dollars'  worth  of  gold  in  a 
day,  that  gold  brings  the  same  price  per  ounce  as  the  gold 
does  for  which  another  miner  spent  a  month  in  digging  an 
ounce.  Buyers  of  goods  pay  for  results :  they  pay  for  the 
creation  of  facts  and  conditions  without  estimating  the 
amount  of  labor  which  was  expended  in  order  to  produce 
those  results.  The  price  of  one  thing  is  not  affected  by 
the  fact  that  it  may  have  cost  either  more  or  less  labor  to 
produce  it  than  was  expended  in  producing  a  precisely 
similar  thing. 

Thus  we  see  that  labor  is  necessary  to  create  value,  and 
that  therefore,  if  all  other  things  were  equal,  the  amount  of 
labor  required  to  create  a  thing  would  be  a  correct  index 
of  its  value. 

WHY    LABOR   DOES   NOT   ALWAYS   CREATE   WEALTH. 

But  other  things  are  seldom  equal,  and  therefore  there  is 
a  law  which  determines  the  amount  of  value  which  shall  be 
created  by  a  giwQn  amount  of  labor.  The  real  force  which 
evokes  value  where  it  did  not  exist,  and  which  increases  the 
value  of  things  already  created,  is  a  suitable  change  in  the 


WHAT  CREATES  VALUE. 


173 


relation  of  facts  and  things  to  mankind.  If  labor  produce 
this  suitable  change,  labor  creates  value.  But  if  labor  be 
not  directed  with  sufficient  intelligence,  if  the  desired  re- 
sult does  not  flow  from  it,  the  labor  is  wasted.  //  is  the 
proper  amditiois  ivhicJi  create  value :  labor  is  merely  an  in- 
strument which,  when  rightly  managed,  forms  circumstances 
and  facts  under  the  influence  of  which  value  is  created  or 
enhanced. 

More  or  less  labor  is  always  required  either  to  create  a 
valuable  thing  or  to  enhance  the  value  of  something  already 
created.  But  the  amount  of  value  resulting  from  a  given 
amount  of  labor  depends  on  the  circumstances  under  which 
it  is  performed,  and  the  intelligence  with  which  it  is  guided. 

To  a  very  large  extent,  the  foregoing  simple  fact  is.  not 
recognized.  All  over  the  world  an  enormous  amount  of 
labor  is  constantly  being  performed  which  creates  no  value 
whatever,  simply  because  it  is  unskillfully  performed  or  un- 
wisely directed.  It  frequently  happens  that  a  large  amount 
of  labor  is  expended  on  some  enterprise  without  reference 
to  the  conditions  which  the  completion  of  that  enterprise 
will  produce.  A  common  example  of  this  is  the  construc- 
tion of  useless  canals,  railroads,  streets  and  buildings. 
These  and  other  ill-judged  schemes  are  continually  started 
and  carried  on  by  States,  cities,  companies  and  individuals. 
A  considerable  number  of  these  ruinous  works  are  under- 
taken solely  because  other  works  of  the  same  kind,  but  per- 
formed under  different  conditions,  are  successful. 

Comparatively  recently,  a  large  number  of  the  people  of 
Connecticut  spent  a  considerable  amount  of  money  under 
the  delusion  that  value  could  be  created  by  building  a  little 
canal  from  New  Haven,  northerly  to  the  Berkshire  Moun- 
tains !  A  large  amount  of  value  was  created  by  the  Erie 
Canal,  but  it  was  not  produced  simply  by  the  expenditure 
of  a  certain  amount  of  labor,  nor  merely  by  making  a  canal. 
Value  was  produced  by  creating  a  new  condition  ;  viz.,  the 
union  of  the  Hudson  River  with  the  chain  of  great  Western 
lakes,  thereby  establishing  a  cheap  mode  of  changing  the 
condition    of  goods  by  carrying   them   from  places  where 


174  SOCIAL  STRUGGLES. 

they  had  one  value  to  places  where  they  had  another  and 
a  greater  value. 

Many  persons  suppose  because  one  work, — called  a  canal, 
or  railroad,  a  mine,  or  a  factory, — creates  value,  that  there- 
fore any  other  enterprise  of  the  same  name  and  kind  will 
prove  remunerative.  Absurd  as  this  mistake  may  seem,  it 
is  frequently  made,  and  vast  amounts  of  labor  are  annually 
squandered  in  consequence.  A  multitude  of  these  unfortu- 
nate schemes  would  never  get  beyond  the  budding  stage  if 
their  originators  would  calmly  sit  down  and  inquire  :  "  After 
this  work  is  performed,  will  the  same  facts  and  conditions 
which  environ  similar  works  in  successful  operation  sur- 
round this  enterprise  ?  " 

The  practical  lesson  from  the  foregoing  is,  that  value, 
and  therefore  wealth,  is  most  rapidly  created,  legitimately, 
by  the  persons  who  best  kiioiv  lioiv  to  create  conditions  which 
will  supply  the  various  wants  and  desires  of  mankind. 

HOW   WE   STATE   VALUE. 

Having  considered  the  essential  nature  of  value,  let  us 
next  see  how  we  define  our  ideas  of  its  varying  amounts, 
— how  we  state  the  different  degrees  in  which  value  may  be 
attached  to  a  thing. 

The  majority  imagine  that  values  are  measured  by  money 
and  that  therefore  money  must  have  intrinsic  value,  just  as 
a  peck  measure  must  have  a  certain  bulk  in  order  to  meas- 
ure bulk.  A  little  consideration  will  show  that  we  do  not 
measure  values  with  money,  in  the  sense  that  we  measure 
distance  with  a  yard-stick  or  tape-line.  Values  are  meas- 
ured by  the  judgment.  We  can  give  a  child  a  quart  measure 
and  send  him  out  to  buy  a  quart  of  milk,  because  the  meas- 
ure determines  the  amount  of  a  given  article  ;  but  no  one 
w^ould  think  of  trusting  a  child  to  "measure"  value  ^Wh. 
money.  If  money  measured  value,  we  could  give  a  child  a 
handful  of  gold  coins  and  entrust  him  to  buy  a  horse.  If 
gold  coins  measured  value  accurately,  as  we  are  told  they 
do,  then  possession  of  these  coins  would  enable  one  man  to 
estimate  values  as  wisely  as  another,  just   as  one  man   can 


HOW  VALUE  IS  ESTIMATED. 


175 


take  a  ten-foot  pole  and  measure  a  hundred  feet  almost  as 
well  as  another. 

V  and  W  each  have  ten  gold  eagles  and  go  out  shopping. 
They  visit  a  number  of  different  stores  and  each  one  ex- 
pends her  money  for  a  variety  of  articles  of  wearing  ap- 
parel. After  returning  home,  the  goods  purchased  are 
compared  with  each  other  and  it  is  found  that  V  has  ob- 
tained a  better  quality  of  goods,  has  received  far  more 
value  for  her  money,  than  W.  When  they  started  out  shop- 
ping, the  things  commonly  called  the  "measure  of  value  " 
which  each  one  took  along  with  her,  were  alike.  But  one 
woman  carried  along  with  her  more  judgment  and  intelli- 
gence in  regard  to  what  she  proposed  to  buy  than  the  other. 

Values  are  our  judgments  of  the  relative  worth  to  us, 
under  our  circinnstanccs,  of  one  thing  as  compared  with  an- 
other. There  is  no  other  way  of  stating  our  ideas  of  the 
value  of  a  certain  thing,  at  a  given  time  and  place,  except 
by  comparing  it  with  some  other  thing.  There  are  gener- 
ally one  or  more  things  which  circumstances  make  us  want 
more  than  we  do  other  things.  Therefore  we  state  value 
by  saying  how  much  of  tJiis  we  will  give  for  so  much  of 
that.  Our  conduct  is  essentially  the  same,  whether  we  are 
giving  our  views  of  value  by  comparing  one  commodity 
with  another  commodity,  or  whether  we  are  comparing 
money  with  a  commodity. 

A  man's  idea  of  the  value  of  a  certain  thing  to  himself 
does  not  depend  simply  upon  his  actual  circumstances. 
His  judgment  and  opinion  of  his  needs  determine  the 
amount  of  value  which  he  will  put  upon  a  certain  thing. 
Furthermore,  a  man's  idea  of  the  value  of  one  thing  always 
depends  on  the  way  in  which  he  compares  it  with  anotJier 
thing.  Or  in  other  words,  a  man's  idea  of  the  value  of  one 
thing  depends  on  his  ideas  of  the  value  of  the  thing  with 
which  he  compares  it.  Consequently  a  correct  judgment  in 
regard  to  values  is  only  possible  to  those  who  have  intelli- 
gence concerning  the  thing  to  be  appraised.  Hence,  as  a 
matter  of  daily  occurrence,  when  we  wish  to  "  measure  "  the 
value   of  a  particular  thing  we  do   not   approach  or  test   it 


176  SOCIAL  STRUGGLES. 

with  money.  If  we  are  not  intelligent  in  regard  to  it  our- 
selves, we  employ  some  one  who  has  that  special  knowledge 
to  aid  us.  We  employ  a  jeweler  to  tell  how  much  a  pre- 
cious stone  is  worth.  We  get  a  man  who  knows  the  good 
points  of  a  horse  to  select  or  appraise  a  horse.  We  employ 
a  man  familiar  with  real  estate  and  buildings  to  tell  us  the 
value  of  a  house,  and  we  consult  one  skilled  in  knowledge 
of  ships  if  we  wish  a  vessel  appraised.  In  short,  when  we 
wish  to  "  measure  "  the  value  of  a  thing,  we  employ  in- 
telligence and  judgment  in  regard  to  that  thing.  V^o.  com- 
pare it  with  other  things  and  we  use  money  and  money- 
terma  to  facilitate  a  statement  of  this  comparison. 

Purchases  and  sales  are  made  after  consideration  ;  the 
price  depends  upon  the  intelligence,  judgment,  and  necessi- 
ties of  the  buyer  and  seller — it  is  not  "  measured  "  by  the 
money  used  in  the  transaction.  We  express  ourselves  in 
terms  of  money  merely  as  a  convenient  mode  of  stating  our 
ideas  and  judgment  of  the  value  of  a  given  thing,  so  that 
others  can  understand  us.  The  unit  of  value,  the  dollar, 
for  instance,  is  used  to  compare  the  value  of  one  thing  with 
another.  The  whole  community  speak  of  things  as  being 
worth  so  many  dollars,  and  thus  they  arrive  at  a  common 
understanding  of  value  by  using  a  common  means  of  com- 
parison. If  one  man  said  a  thing  were  worth  so  many  bush- 
els of  wheat,  another  man  said  it  were  worth  so  many  days' 
labor,  and  another  man  said  it  were  worth  so  many  pounds 
of  cheese,  etc.,  etc.,  great  difficulty  of  making  exchanges 
would  exist.  But,  by  all  parties  using  the  same  comparison, 
exchanges  are  facilitated  and  our  judgments  of  values  are 
steadied. 

Suppose  two  farmers  wish  to  trade  stock.  Both  have  in 
mind,  consciously  or  unconsciously,  an  idea  of  the  value  at- 
tached to  the  unit  of  value,  the  dollar.  One  says  :  "  Those 
pigs  of  rnine  are  worth  about  five  dollars  apiece  ;  that  heifer 
of  yours  is  worth  about  four  times  as  much  as  one  of  my 
pigs.  I  will  give  you  my  three  pigs  and  five  dollars  for  your 
heifer."  Money  is  thus  used,  not  to  measure  vdXwQ,  but  as  a 
help  to  compare,  count  and  state  values.      We  "measure" 


NO  SUCH  A   THING  AS  INTRINSIC  VALUE. 


177 


value  with  our  brains;  we  record  and  statr  value  by  using 
the  names  of  units  of  money. 

W.  M.  Evarts,  our  former  Secretary  of  State,  has  made 
an  elaborate  argument  intended  to  show  that  values  are  meas- 
ured by  money  just  as  we  measure  distance  with  a  rod,  or 
weight  with  pound  weights  ;  and  that  therefore  money  must 
have  "  intrinsic  "  value  in  order  to  measure  value.  The 
learned  gentleman  did  not  tell  us  how  the  value  of  money 
was  determined  in  order  to  obtain  a  "  measure  "  to  start 
with.  An  inquiry  of  this  kind  would  have  led  him  to  the 
conclusion  that  the  value  of  money  is  determined  by  the 
judgment,  and  that  the  value  of  all  things  computed  in 
money  must  therefore  rest  on  the  same  foundation  as  the 
value  of  money  itself. 

When  a  farmer  takes  a  hundred  bushels  of  wheat  to  mar- 
ket and  exchanges  it  for  money,  a  double  comparison  takes 
place.  The  wheat  is  com.pared  with  money,  and  the  money 
is  compared  with  wheat.  The  dealer  in  grain  buys  the 
wheat  and  the  farmer  buys  the  money.  The  wheat  "  meas- 
ures "  the  value  of  the  money  just  as  truly  as  the  money 
"  measures  "  the  value  of  the  wheat. 

DISTINCTION   BETWEEN  VALUE   AND  INHERENT  QUALITIES. 

A  considerable  portion  of  the  financial  legislation  of  this 
country,  for  the  past  fifteen  years,  has  been  enacted  on  the 
theory  that  gold  and  silver  possess  "  intrinsic  value,"  and 
that  such  value  is  necessary  to  "  measure  "  other  values 
with. 

A  man  was  arrested  for  beating  his  wife.  Defense  was : 
"  I  treat  women  with  the  utmost  kindness.  I  have  no 
wife." 

In  fact,  there  is  no  such  thing  as  intrinsic  value.  We  do 
not  "  measure  "  value  with  money  in  the  sense  that  we 
could  if  such  a  thing  as  intrinsic  value  actually  existed. 
When  silver  coins  "first  took  the  place  of  fractional  paper 
money,  many  persons  were  surprised  to  find  that  their  pur- 
chases and  sales  went  on  as  before  the  circulation  of  an 
alleged  "  measure  of  value." 
12 


■I^S  SOCIAL  STRUGGLES. 

The  idea  that  gold,  silver,  copper  and  other  things  pos- 
sess "  intrinsic  value  '  has  arisen  from  not  recognizing  the 
distinction  between  the  intrinsic,  inherent,  physical  qual- 
ities of  a  thing  and  the  value  of  that  thing.  Thus,  anthra- 
cite coal  has  certain  intrinsic  qualities.  It  is  black,  com- 
posed chiefly  of  carbon,  is  combustible,  and  has  certain 
other  intrinsic,  physical  qualities.  Neither  time,  location, 
nor  any  other  circumstance,  has  any  effect  on  these  intrin- 
sic qualities.  If  every  nation  in  the  world  should  enact 
that  anthracite  coal  should  thereafter  be  white,  it  would 
not  have  the  slightest  effect  on  its  color.  The  inher- 
ent, intrinsic  qualities  of  coal  are  precisely  the  same  at  the 
mines  as  when  carried  to  the  market  where  it  has  the  great- 
est value. 

VALUE   NOT  AN   INTRINSIC   QUALITY. 

The  mistake  lies  in  assuming  that  value  is  an  "  intrinsic  " 
quality.  If  its  value  were  an  inherent  quality,  coal  would 
have  the  same  value  under  all  circumstances ;  just  as  its 
color  and  other  intrinsic  qualities  are  invariable.  But  we  all 
know  that  the  value  of  coal  depends  on  the  conditions  un- 
der which  it  is  placed.  Legislation  could  not,  in  the  slight- 
est degree,  affect  a  single  one  of  the  intrinsic  qualities  of 
anthracite  coal.  But  legislation  could  be  enacted  which 
would  materially  affect  its  value.  For  instance,  if  a  heavy 
tax  were  laid  on  all  the  bituminous  coal  mines,  and  rigidly 
collected,  it  would  increase  the  cost  of  bituminous  coal  and 
thus  indirectly  raise  the  value  of  anthracite  coal.  Legisla- 
tion might  be  enacted  which  would  practically  rob  the 
owners  of  bituminous  coal  mines  of  a  considerable  portion 
of  their  value  and  transfer  this  value,  thus  wrongfully  taken, 
to  the  owners  of  anthracite  mines.  Such  a  measure  would 
be  facilitgited  by  the  fact  that  anthracite  coal  deposits  are 
limited  to  a  comparatively  small  area. 

Gold  has  certain  inherent,  physical  qualities  which  can- 
not be  altered  except  by  destruction  of  that  metal.  It  has 
a  beautiful  orange  color,  is  very  malleable,  has  a  high  spe- 
cific gravity,  and  does  not  rust.     These  are  the  intrinsic 


DISTINCTION  BETWEEN  VALUE  AND  QUALITIES.      ijg 

qualities  of  gold,  and  they  are  fixed  and  invariable  under 
all  conditions  and  circumstances.  If  the  stock  of  gold  in 
human  possession  were  reduced  to  one  hundredth  part  of 
the  present  stock,  each  ounce  of  that  gold  would  have  pre- 
cisely the  same  intrinsic  qualities  which  are  now  possessed 
by  each  ounce  of  gold.  On  the  other  hand,  if  a  mountain 
of  pure  gold  were  discovered,  so  easy  of  access  that  it  could 
be  mined  as  cheaply  as  coal  now  is,  that  fact  would  not 
affect  the  intrinsic  qualities  of  gold  in  the  slightest  degree. 
Each  ounce  of  the  gold  taken  from  such  a  mine  would  have 
the  identical,  intrinsic  qualities  which  are  now  possessed  by 
gold. 

If  all  the  nations  of  the  world  were  to  enact  that  gold 
should  hereafter  be  the  sole  legal  tender;  and  also  prohibit 
the  use  of  paper  money  entirely,  in  every  form  whatsoever, 
the  intrinsic  qualities  of  gold  would  remain  unchanged.  It 
would  still  be  a  bright  yellow  color,  be  malleable,  very 
'heavy,  and  unaffected  by  exposure  to  the  air. 

LEGISLATION    HAS   NO    EFFECT  ON   INTRINSIC   QUALITIES. 

Legislation  which  might  decrease  the  demand  for  gold 
would  have  no  effect  on  its  intrinsic  qualities.  The  univer- 
sal demonetization  of  gold  would  not  affect  its  weight,  its 
color,  nor  any  other  one  of  its  intrinsic  qualities  in  the 
least. 

The  aforesaid  facts  in  regard  to  gold  are  equally  true  in 
regard  to  silver,  copper,  tin  and  all  other  metals.  Each 
metal  possesses  intrinsic  qualities  peculiar  to  itself  which 
cannot  in  the  least  be  affected  by  legislation,  scarcity, 
plenty,  time,  or  any  other  condition  or  circumstance  what- 
soever. A  multitude  of  persons  suppose  the  "intrinsic" 
qualities  of  silver  have  changed  since  1872.  But,  in  fact, 
we  have  no  evidence  that  any  change  in  the  intrinsic  quali- 
ties of  silver  has  occurred  since  the  creation  of  the  world. 
Its  intrinsic  qualities  are  invariable,  and  therefore  unchange- 
able by  legislation. 


l8o  SOCIAL  STRUGGLES. 


A  PROLIFIC  ERROR. 


The  parent  of  an  enormous  amount  of  unwise  legislation 
is  the  fundamental  error  of  assuming  that  value  is  an 
"  intrinsic  quality  "  of  gold  and  silver.  Persons  talk  about 
silver  having  "  lost  a  portion  of  its  intrinsic  value."  The 
plain  fact  is  that  silver  never  had  any  intrinsic  value.  It 
always  possessed  certain  intrinsic  physical  characteristics 
and  qualities,  but  \\.'s,valuc  has  always  depended  on  precisely 
the  same  circumstances  and  conditions  which  have  given 
value  to  gold,  iron,  lead,  copper,  and  all  other  metals  and 
things  ;  viz.,  its  supply  relative  to  the  demand  for  it  ;  its 
relative  importance  compared  with  other  things.  When 
people  say,  "Legislation  has  no  effect  on  value,"  they  have 
always  previously  assumed  that  value  was  an  intrinsic  qual- 
ity.    They  confound  ^.  physical  quality  with  a  result. 

WHAT   IS    NECESSARY   TO    THE   EXISTENCE   OF   VALUE.      . 

Nothing  is  "valuable"  unless  three  facts  unite.  First. 
A  thing  must  possess  certain  intrinsic,  physical  qualities 
which  adapt  it  to  supplying  a  human  want.  Second.  A 
person  must  have  a  want  which  the  intrinsic,  inherent  quali- 
ties of  a  certain  thing  would  supply.  Third.  The  person 
having  the  want  must  be  supplied  with  the  thing  whose 
intrinsic  qualities  satisfy  that  want.  Then  the  thing  pos- 
sessing those  qualities  has  a  value.  The  amount  and 
degree  of  such  value  depends  entirely  on  the  circumstances 
under  which  the  want  is  supplied  ;  on  the  urgency  and 
intensity  of  the  want ;  on  the  difficulty  of  supplying  it  in 
any  other  way  ;  and  on  the  fullness  with  which  the  desired 
thing  satisfies  the  need. 

To  illustrate  how  value  arises  from  the  union  of  certain 
conditions,  let  us  suppose  a  man  suffering  from  cold  and  in 
want  of  protection  from  the  air.  A  woolen  blanket  pos- 
sesses the  intrinsic  qualities  which  would  supply  this  man's 
wants.  When  the  blanket  is  placed  in  possession  of  the 
man,  a  value  is  created, — a  want  has  been  supplied  with  a 
substance  possessing  the  requisite  intrinsic  qualities  to  sup- 


1 


I 


BOW  VALUES  ARE  CHANGED.  l3l 

ply  that  want.  The  degree  of  the  value  of  said  blanket 
to  the  shivering  man  depends  on  the  surrounding  circum- 
stances. It  might  be  so  that  the  man  would  regard 
possession  of  the  blanket  as  a  matter  of  life  or  death  to 
him  ;  or,  it  might  be  so  that  his  wants  could  otherwise 
be  easily  supplied  and  thus  give  the  blanket  the  value 
ordinarily  possessed  by  it. 

VALUE   IS   ALWAYS    RELATIVE. 

When  a  man  talks  of  the  ''  value  "  of  a  thing,  it  is  only 
another  way  of  saying  :  "  This  thing,  to  me,  under  the 
present  circumstances,  is  worth  more  than  that  thing,  or 
those  things."  Value  is  an  idea  of  the  relative  importance 
to  a  man,  under  his  existing  circumstances,  of  one  thing  as 
compared  with  another  thing.  Thus  a  wounded  soldier 
lying  on  the  battle  field  would  think  a  twenty-dollar  gold 
coin  of  much  less  importance  than  a  drink  of  water.  This 
is  simply  because  the  value  of  the  coin  is  not  "  intrinsic," 
but  the  creation  of  circumstances.  Ordinary  conditions 
give  it  its  ordinary  value.  Extraordinary  conditions  either 
raise  or  lower  its  value  to  an  extraordinary  degree.  Leg- 
islation can  affect  the  value  of  coins  to  the  extent  that  it 
can  increase  or  diminish  their  relative  importance  as  com- 
pared with  other  things.  Whenever  the  relative  importance 
of  a  thing  which  possesses  intrinsic  qualities  adapted  to  the 
supply  of  human  necessities  and  desires  is  increased,  the 
advantage  of  owning  such  a  thing  and  its  value  are  thereby 
increased.  Any  event  which  makes  it  more  difficult  to  ob- 
tain possession  of  a  thing  the  ownership  of  which  is  desira- 
ble, increases  what  we  call  the  "value"  of  that  thing. 
The  relative  importance,  and  consequently  the  value,  of 
one  thing  as  compared  with  all  other  things  may  be  changed 
by  various  events. 

First.  It  may  become  smaller  in  actual  amount,  scarcer, 
and  more  difficult  to  obtain  in  consequence.  Thus  a 
short  crop  of  wheat  throughout  the  world  makes  that  grain 
more  valuable.  Its  importance  in  comparison  with  other 
things  is  increased. 


1 82  SOCIAL  STRUGGLES. 

Second.  It  may  become  larger  in  actual  amount, 
plentier,  and  more  easily  obtained.  An  unusually  large  crop 
of  wheat  throughout  the  world  diminishes  the  relative  im- 
portance of  a  bushel  of  wheat,  as  compared  with  the  im- 
portance of  other  things,  and  thus  diminishes  its  value. 

Third.  The  amount,  the  supply  of  a  certain  thing  may 
be  unchanged,  and,  at  the  same  time,  its  relative  impor- 
tance and  consequently  its  value  may  be  either  increased 
or  diminished  by  other  events  which  either  increase  or 
diminish  the  demand  for  such  a  thing.  This  fact  was 
noted  by  Adam  Smith,  and  has  ever  since  been  recognized 
by  every  respectable  writer  on  political  economy.  When- 
ever two  things  are  used  for  the  same  purpose  and  one  of 
those  things  becomes  plentier,  or  less  difficult  to  obtain,  the 
value  of  the  other  thing  is  thereby  diminished.  And,  on 
the  other  hand,  whenever  one  of  those  things  becomes 
scarcer,  or,  for  any  reason,  more  dii^cult  to  obtain,  the 
value  of  the  other  thing  is  increased. 

Beef  and  mutton  are  used  for  a  similar  purpose.  When 
beeves  are  very  plenty  and  cheap,  the  tendency  is  for  people 
to  buy  beef  instead  of  mutton.  This  reduces  the  price  of 
mutton.  W'hen  beef  is  very  scarce  and  dear,  mutton  is  in 
greater  demand  and  consequently  more  valuable.  An  in- 
crease or  a  diminution  in  the  supply  of  mutton  has  a  sim- 
ilar effect  on  the  demand  for  beef. 

When  mules  and  oxen  are  plenty  and  cheap,  there  is 
less  demand  for  draught-horses.  The  importance  of  a 
draught-horse  is  thus  relatively  diminished  and  his  value 
lessened.  When  mules  and  oxen  are  scarce  and  high, 
the  relative  importance  of  a  draught-horse  is  thereby 
increased  and  his  value  consequently  raised. 

When  bituminous  coal  is  made  plentier  and  cheaper  the 
inevitable -effect  is  to  lessen  the  use  and  demand  for  anthra- 
cite coal.  If  bituminous  coal  should  become  scarcer,  or,  for 
any  reason,  less  desirable  or  more  difficult  to  obtain,  the  value 
of  anthracite  coal  would  be  enhanced. 

Hundreds  of  illustrations  similar  to  the  foregoing  could 
be  cited  if  necessary.     The  curious  thing  is  that  the  appli- 


EACH  MAN  SHOULD  THINK  FOR  HIMSELF. 


183 


cation  of  the  aforesaid  established  and  familiar  principle 
has  been  so  largely  overlooked  in  regard  to  the  relative 
value  of  gold  and  silver.  Prior  to  the  demonetization  of  sil- 
ver, gold  and  silver  were  both  legal  tenders,  and  used  for  the 
same  purpose.  The  disuse  of  silver  as  a  legal  tender  imme- 
diately increased  the  relative  importance  of  gold  ;  it  became 
relatively  scarcer  and  more  difificult  to  obtain,  and  its  value 
was  therefore,  inevitably  increased.  Many  persons  have 
supposed  the  gold  dollar  unchanged  in  value  because  its 
weight  is  unchanged,  and  because  the  number  of  gold 
dollars  has  not  been  materially  diminished.  Such  persons 
forget  that  all  things  are  relative,  and  that  the  number  of 
gold  dollars,  relative  to  the  demand  for  tJiein,  has  been 
largely  diminished. 

ONLY  ONE  WAY  TO  LEARN  THE  NATURE  OF  VALUE, 

Very  little  substantial  progress  can  be  made  toward  un- 
derstanding finance  and  kindred  topics  without  first  clearly 
learning  the  essential  nature  of  value.  There  is  only  one 
way  to  acquire  this  indispensable  knowledge.  The  student 
must  carefully  think  the  subject  over  for  himself  from 
beginning  to  end.  If  he  be  too  lazy  to  do  this,  he  will 
never  comprehend  what  value  is,  and,  necessarily,  will  never 
have  a  correct  idea  about  either  it  or  any  related  subject. 

This  consideration  of  value  can  and  should  be  made  by 
using  the  simplest  and  most  familiar  things  as  objects  of 
study.  Thus  a  person  who  lives  near  a  brick-yard  can  find 
therein  a  practical  illustration  of  every  fact  and  principle 
heretofore  discussed,  concerning  value.  He  will  first  ob- 
serve a  bank  of  undug  clay.  This  he  will  notice  ha's  certain 
intrinsic  qualities  which  make  it  suitable  material  for  mak- 
ing bricks.  He  will  next  find  that  the  value  of  clay  in  the 
bank  is  very  small.  That  even  this  small  amount  of  value 
is  not  "  intrinsic  "  can  readily  be  seen  by  asking:  Are  there 
not  many  locations  wherein  such  a  clay  bank  would  have 
no  appreciable  value  whatsoever? 

The  observer  will  next  note  that  four  thousand  pounds  of 
unworked  clay  are  worth  only  a  few  cents,  and   four  thou- 


1 84 


SOCIAL  STRUGGLES. 


sand  pounds  of  good  bricks  are  worth  ten  dollars.  This 
change  of  value,  he  will  find,  has  arisen  because  changes 
have  been  made  in  the  clay  by  making  it  into  things  which 
will  supply  a  human  want. 

He  may  next  see  two  piles  of  brick,  upon  each  of  which 
the  same  amount  of  labor  has  been  expended.  One  pile  is 
worth  ten  dollars  per  thousand,  while  the  other  is  worth 
only  five  dollars  per  thousand.  Upon  inquiry,  he  will  find 
this  is  so  because  one  kiln  was  spoiled  by  unskillful  burning  ; 
the  requisite  amount  of  labor  was  used  but  it  did  not  pro- 
duce the  required  conditions. 

If  told  that  the  best  bricks  have  an  "  intrinsic"  value  of 
ten  dollars  per  thousand,  the  student  can  test  the  accuracy 
of  that  statement  by  asking:  Could  these  bricks  not  be 
taken  to  a  place  where  they  would  have  no  appreciable 
value  ?  Their  size,  shape,  weight  and  other  intrinsic  quali- 
ties would  not  be  altered  by  such  a  removal,  but  their  value 
would  be  destroyed  by  an  unfavorable  change  of  the  con- 
ditions  surrounding  them. 

In  the  simple  manner  aforesaid,  the  fact  that  value  is  EX- 
TRINSIC and  not  INTRINSIC  can  be  demonstrated  by  study- 
ing the  facts  relative  to  any  familiar  object  to  which  the  idea 
of  value  is  ordinarily  attached.''^ 

*    FALSE   THEORIES  IN  REGARD  TO  LAND. 

It  is  commonly  supposed  that  the  value  of  land  in  cities  is  entirely  due 
to  the  amount  of  labor  which  has  been  expended  upon  it.  If  this  sup- 
position were  correct,  it  would  necessarily  follow  that  land  within  muni- 
cipal bounds,  once  made  valuable  by  an  expenditure  of  labor  thereon, 
would  maintain  such  value  no  matter  what  changes  in  other  conditions 
might  occur. 

Let  us  test  this  belief  by  a  hypothesis  which  would  place  New  York  City 
under  conditions  similar  to  those  which  frequently  in  the  past  have  iso- 
lated great  cities  from  the  channels  of  commerce  and  reduced  them  to 
insignificance.  Invention,  discovery,  wars,  and  political  transformations 
have  often  changed  the  course  of  the  commerce  which  nurtured  a  city. 
Instead  of  those  causes,  suppose  an  earthquake  should  change  the  rela- 
tion which  Manhattan  Island  now  occupies  to  the  United  States.  Sup- 
pose the  Hudson  River  should  pass  through  the  Highlands  at  West 
Point,  and  a  channel  be  opened  so  that  its  water  emptied  into  a  harbor, 


CONDITIONS  DETERMINE  LAND   VALUES. 


185 


far  surpassing  the  present  harbor  of  New  York,  in  the  middle  of  the 
coast  of  New  Jersey.  Suppose  the  same  convulsion  should  place  a 
mountain  range  in  the  lower  Hudson  valley  and  should  destroy  the  East 
River  and  the  present  New  York  harbor. 

What  effect  would  said  supposed  changes  inevitably  have  upon  the 
value  of  the  land  now  so  enormously  valuable?  Immediately  after  the 
earthquake,  commerce  would  begin  in  the  new  harbor.  New  York  City- 
would  begin  to  move  to  a  spot  whose  conditions  better  fitted  it  to  be  the 
commercial  center  of  a  great  nation.  The  vast  amount  of  labor  hereto- 
fore expended  on  the  land  constituting  Manhattan  Island  would  not  suf- 
fice to  arrest  its  depreciation  for  a  single  day.  Not  another  new  building 
would  be  erected  in  New  York.  Land  now  valuable  would  be  placed 
under  circumstances  which  would  render  it  comparatively  worthless. 
What  is  now  deemed  the  most  desirable  kind  of  property,  land  on  the 
business  streets  of  New  York,  would  then  be  unsalable  at  almost  any 
price. 

The  aforesaid  events  would  occur  because  the  sum  total  of  conditions 
which  now  give  value  to  the  land  of  New  York  City  would  cease  to  exist. 
The  condition  of  labor  expenditure  on  the  land  would  remain,  but  that 
would  not  avail  to  prevent  a  tremendous  change  of  land  values.  It 
would  then  fully  appear  that  the  amount  of  labor  expended  on  municipal 
land  is  neither  the  sole,  nor  the  dominant  thing,  which  gives  and  sustains 
its  value.  Such  land  rises  and  falls  in  value  just  in  the  proportion  that  it 
fills  and  supplies  a  commercial,  industrial,  and  social  want,  not  merely  of 
the  residents  of  the  particular  city  in  which  it  lies,  but  of  the  nation  ;  and, 
in  case  of  cities  largely  engaged  in  foreign  commerce,  the  population  of 
the  entire  globe.  In  verification  of  this,  we  have  only  to  consider  the  his- 
tory of  the  land  where  large  and  wealthy  cities  once  stood,  whose  ruin 
was  wrought  by  events  that  placed  other  locations  under  conditions  which 
gave  them  greater  fitness  for  the  supply  of  human  desires.  Labor  be- 
stowed upon  municipal  land  is  simply  one  of  many  conditions  upon  which 
its  value  depends.  Whether  it  shall  raise  the  value  of  the  land  upon 
which  it  is  expended,  or  not,  depends  on  the  ultimate  result  of  such  labor, 
viz.,  whether  it  places  the  land  under  conditions  which  will  make  it  sup- 
ply human  wants  better  than  other  lands  with  which  it  is  in  competition. 
Unlike  things  which,  in  response  to  an  increased  demand  therefor,  can  be 
indefinitely  multiplied  by  labor,  the  amount  of  land  within  a  given  area 
cannot  be  increased.  Hence,  an  enlarged  demand  for  land  in  a  certain 
location  must  result  in  an  additional  value  being  conferred  on  said  land, 
simply  because  the  want  supplied  by  it  has  been  intensified.  The  condi- 
tions surrounding  the  land  have  been  so  changed  as  to  enable  it  to  supply 
a  greater  need  than  previously. 

The  theory  that  the  value  of  land  is  governed  by  a  peculiar  and  special 
law  may  therefore  be  dismissed  as  untenable.     But  the  well  established 


1 86  ■  SOCIAL  STRUGGLES. 

fact,  that  the  ownership  by  a  few  individuals  of  very  large  amounts  of 
land  is  a  pernicious  monopoly,  remains  for  consideration,  after  erroneous 
theories  relative  thereto  are  abandoned.  The  remedy  for  such  monopo- 
lies is  indicated  in  another  chapter,  viz.:  Sufficient  taxation  to  make  the 
public  burdens  of  the  owners  of  such  land  as  great  as  the  benefits  they 
derive  from  its  monopoly. 

Whenever  and  wherever  one  man  owns  an  amount  of  land  sufficiently 
great  to  make  such  ownership  an  injury  to  the  community  and  State,  the 
portion  of  land  in  excess  of  what  is  necessary  for  the  supply  of  his  per- 
sonal needs  should  be  taxed  heavily  enough  to  induce  him  to  dispose  of 
it  at  a  fair  price,  to  those  in  need  of  homesteads.  At  present,  on  the  av- 
erage, the  owner  of  one  city  lot,  with  a  home  thereon,  pays  a  higher  pro- 
portional tax  than  the  capitalist  who  owns  one  thousand  vacant  lots. 
And  the  owner  of  a  farm  of  one  hundred  acres  is  taxed  relatively  higher 
than  the  man  who  monopolizes  twenty  thousand  acres.  The  present  sys- 
tem is  inequitable,— it  is  not  fair  play. 

But  it  should  be  remembered  that  taxation  is  a  tremendous  power,  and 
when  directed  by  rash  ignorance,  an  engine  certain  to  produce  great 
wrong  and  disaster.  That  its  lands  should  all  be  managed  and  improved 
with  the  greatest  possible  economy,  care,  and  intelligence,  is  a  matter 
of  the  highest  importance  to  a  nation.  Therefore  all  changes  of  na- 
tional policy  in  regard  to  land  taxation  should  be  made  slowly  and  cau- 
tiously, after  full  investigation.  While  seeking  to  abate  the  evils  of  land 
monopoly,  care  should  be  taken  to  avoid  the  opposite  extreme,  viz.  :  A 
policy  the  tendency  of  which  vi'ould  be  to  cause  the  abandonment  and 
neglect  of  all  but  the  most  fertile  and  desirable  lands,  and  make  the 
ownership  and  improvement  of  land  so  unprofitable  as  to  induce  the 
vast  majority  to  study  how  small  an  amount  of  land  they  shall  cultivate 
and  beautify.  Baleful  results  would  certainly  flow  from  the  adoption  of 
measures  whose  tendency  would  be  to  make  men  more  nomadic  and  les- 
sen their  affection  for  their  homes. 

As  only  one  thing  can  be  discussed  and  settled  at  a  time,  it  would  be 
unfortunate  to  have  public  attention  concentrated  on  the  minor  question 
of  land  monopoly  until  the  subject  of  paramount  importance,  the  currency 
question,  is  first  disposed  of. 


CHAPTER  IX. 

The  Silver  Question :  It  Compreliends  Many  Things. — Historical  Sketch 
of  the  Silver  Dollar. — Acts  of  1834  and  1837. — Relative  Value  of 
Silver  and  Gold  Dollars. — Option  of  Payment  by  either  Gold  or 
Silver. — Tendency  of  Commerce. — Established  Right  of  both  Credit- 
ors and  Debtors. — Silver  Coinage. — Effect  of  Demonetizing  Silver. — 
Contagiousness  of  Vice.  — False  Doctrines  framed  into'  Law. — Fun- 
damental Facts  about  Gold  and  Silver. — Attempt  to  Demonetize  Gold. 
— Present  Consumption  of  Gold  in  the  Arts. — Origin  of  the  War  on 
Silver. — An  Old  Subterfuge. — Effect  of  Legislation  on  the  Value  of  a 
Dollar. — Value  of  all  things  Dependent  on  the  same  Law. — An  Ex- 
ample of  Legislative  Theft. — A  Talk  with  a  Clergyman. — One  Pur- 
pose under  Various  Pretenses. — A  Doctrine  Dangerous  to  Creditors. 
— Ought  the  Silver  Dollar  to  be  made  Heavier .'' — Danger  of  Rob- 
bing Debtors. — Debt  not  Disreputable. — The  True  Doctrine. — 
Nothing  is  more  Detestable  than  Hypocrisy. — The  Cry  for  Honesty. 
— Groundless  Charges  against  Silver. — Why  Silver  does  not  Circulate. 
— Superiority  of  Paper  Money. — The  Essential  Allegation  in  regard 
to  Gold. — Has  Gold  a  Fixed  Value  } — The  Bullion  Report. — Facts 
which  Overthrow  the  Common  Theory  in  Regard  to  Gold. — Origin 
of  a  Belief  in  the  Fixed  Value  of  Gold. — By  Comparison  with  Things 
other  than  Itself,  is  the  only  Way  in  which  We  can  Ascertain  and 
State  any  of  the  Qualities  of  any  Object  or  Thing. — All  Ideas  are 
Relative. — Need  of  Comparing  One  Thing  with  Something  besides 
Itself. — Value  of  Gold  should  be  Tested  as  all  other  Things  are.— 
Logical  Results  of  Comparing  Gold  only  with  Gold. — Result  of  un- 
limited Coinage  of  Silver. — Correct  Mode  of  Stating  the  Value  of 
Gold  and  Silver. — What  a  Price  is. — Money  changes  in  Price  like 
other  Things. — How  to  Test  the  Price  of  Money. — The  Price  of  Gold. 
— Correct  Test  of  the  Rate  of  Interest. — Public  Debts  and  Taxes. — 
An  Example  of  Benevolence. — The  True  Explanation. — What  has 
changed  the  Value  of  Gold. — America  bearing  down  the  Prices  of 
American  Goods. — Effect  of  Lowering  Prices  in  England. — The 
Delusion  that  Gold  Prices  would  not  Fall. — Effect  of  Making  a 
Metal  Legal  Tender. — Has  Silver  Depreciated  in  Value  .' — How  to 
Test  the  Value  of  Silver. — .An  Official  Table  of  Relative  Prices. — 
Another  Comparison  of  Prices. — Ought  an  Equality  be  Maintained 
between  the  Value  of  Gold  and  Silver  Dollars  ? — Statements  of  the 

187 


J  88  SOCIAL  STRUGGLES. 

New  York  Tributie. —  Money  should  maintain  a  Relative  Uniformity 
in  Amount. — Stability  of  Prices  is  the  Practical  Result  of  a  Stable 
Currency. — The  125-Cent  Dollar. — Labor  a  Test  of  Value. — Silver 
has  Risen  in  Value. — Why  Silver  has  not  Fallen  in  Value. — Silver  has 
always  Fluctuated  in  Value. — Why  England  has  a  Gold  Currency. — 
Should  We  make  Times  harder  in  Europe  ? — Are  Payments  in 
Silver  Honest .'' — Written  Contracts  more  Reliable  than  Vague  Un- 
derstandings.— A  Man  cannot  lose  what  He  never  Owned. — Differ- 
ences in  Relative  Value  of  Gold  and  Silver. — A  Suggestion  for  Con- 
sideration.— Result  of  Entire  Demonetization  of  Silver. — The  Idea 
of  Coercing  England.^ — Ought  Prices  to  t)e  Depressed  by  Legisla- 
tion .'' — The  best  kind  of  Money.— Stable  Money  best  for  the  Masses. 
—A  Stable  Currency  best  for  Debtors. — Why  different  Classes  have 
Different  Ideas. — A  Notorious  Fact. 

The  present  monetary  anei  social  situation  of  affairs  zvill  not 
lose  interest  after  coming  events  have  replaced  it  with  differ- 
ent conditions.  As  an  illustration  of  the  inevitable  tendency 
of  certain  legislation  to  produce  certain  results,  it  will  have  a 
permanent  historical  value  for  guidance  in  the  formation  of 
public  policy  throughout  all  futiLre  time. 

We  have  now  studied  elementary  principles  far  enough 
to  begin  a  consideration  of  the  silver  question. 

A  large  number  of  persons  have  learned  that  a  silver  dol- 
lar is  heavier  than  a  gold  dollar,  and  that  the  materials  from 
which  it  is  made  are  worth  at  present  less  than  the  mate- 
rials from  which  a  gold  dollar  is  made.  These  two  superfi- 
cial and  universally  conceded  facts  are  sufficient  to  make 
them  imagine  themselves  fully  capable  of  writing  and  talk- 
ing about  the  silver  question  with  an  air  of  profound  wis- 
dom. But,  like  all  those  who  talk  on  any  other  subject 
without  first  giving  it  a  careful  examination,  their  state- 
ments and  arguments  af^e  merely  exhibitions  of  conceit 
and  ignorance. 

HISTORICAL   SKETCH    OF  THE   SILVER   DOLLAR. 

The  first  United  States  law  in  regard  to  coining  money 
was  made  April  2,  1792.  That  act  prescribed  that  the 
gold  dollar  should  contain  24  75-100  grains  of  pure  gold, 
and  the  silver  dollar  371^  grains  of  pure  silver.  From 
the  first  settlement  of  the  country,  the  Spanish  milled  dollar 
had   been    the    principal    kind    of    metallic     money    in    use 


ORIGIN  OF  THE  SIL  VER  DOLIAR. 


189 


throughout  the  Colonies,  and  said  act  was  framed  with  ref- 
erence to  maintaining  the  existing  coin  with  no  change  ex- 
cept the  inscription  thereon.  "  There  shall  be  from  time  to 
time,  struck  and  coined  at  the  said  mint,  dollars  or  units, 
each  to  be  of  the  value  of  a  Spanish  milled  dollar,  as  the  same 
is  now  current,  and  to  contain  37  ij^  grains  of  fine  silver." 
The  phrase,  "As  the  same  is  now  current,"  referred  to  the 
average  weight  of  a  number  of  silver  dollars  taken  from  the 
circulation  by  direction  of  the  Secretary  of  the  Treasury, 
Alexander  Hamilton,  and  assayed  to  determine  the  average 
amount  of  pure  silver  contained  therein. 

Although  the  act  of  1792  made  gold  a  legal  tender,  silver 
continued  to  be  the  chief  metallic  money  of  this  country. 

The  aforesaid  act  fixed  the  relative  value  at  one  of  gold 
to  fifteen  of  silver.  The  leading  European  nations  after- 
wards fixed  the  legal  relative  value  of  gold  and  silver  at  one 
of  gold  to  fifteen  and  a  half  of  silver.  The  result  was  that 
gold  became  legally  worth  more  in  Europe  than  in  this 
country,  and  silver  was  legally  worth  less  in  Europe  than 
here.  In  Europe  an  ounce  of  gold  would  buy  fifteen  and  a 
half  ounces  of  silver,  but  in  this  country  it  would  buy  only 
fifteen  ounces.  The  gold  eagle  was  worth  a  little  more  than 
ten  silver  dollars,  and  as  both  creditors  and  debtors  had 
the  option  to  make  payments  in  either  kind  of  money,  the 
slightly  cheaper  money  was  employed.  Then,  as  now,  the 
great  bulk  of  commerce  was  carried  on  without  using  either 
silver  or  gold  dollars,  but  when  metallic  dollars  were  used 
the  silver  dollar  was  usually  selected. 

On  June  28,  1834,  with  a  view  of  bringing  both  gold  and 
silver  into  concurrent  circulation,  Congress  passed  a  coinage 
law  which  left  the  Aveight  of  the  silver  dollar  unchanged, 
but  diminished  the  weight  of  the  gold  dollar  to  23  20-100 
grains  of  pure  gold. 

On  January  18,  1837,  Congress  passed  a  coinage  law  which 
diminished  the  amount  of  alloy  in  the  silver  dollar,  but  left 
the  amount  of  pure  silver  unchanged.  The  weight  of  the  sil- 
ver dollar  was  thus  changed  from  416  grains  to  412^^  grains. 
The  same  law  changed  the  fineness  of  the  eagle  from  one 


190 


SOCIAL  STRUGGLES. 


part  of  alloy  to  eleven  parts  of  fine  gold,  to  its  present  fine- 
ness— one  part  of  alloy  to  nine  parts  of  gold.  This  change 
was  from  one-twelfth  to  one-tenth  alloy.  At  the  same  time 
the  amount  of  pure  gold  in  the  dollar  was  increased  2-100 
of  one  grain. 

ACTS   OF    1834  AND    1 837. 

The  net  result  of  the  said  acts  of  1834  and  1837  was  this: 
The  amount  of  alloy  was  changed.  The  amount  of  pure 
silver  in  the  silver  dollar  was  left  at  the  original  amount, 
371^  grains.  The  amount  of  pure  gold  in  a  gold  dollar 
was  changed  from  24  75-100  grains  of  pure  gold  to  23  22-100 
grains. 

Said  acts  reduced  the  weight  of  a  gold  dollar  more  than  it 
should  to  have  the  legal  value  of  gold  in  this  country  con- 
form to  the  legal  value  of  gold  in  European  nations ;  to 
wit,  one  part  of  gold  to  15)^  of  silver. 

Instead  of  conforming  to  the  European  ratio,  as  should 
have  been  done.  Congress  changed  the  weights  of  the  coins 
so  that  one  pound  of  gold  coins  was  equal  in  value  to  nearly 
16  pounds  of  silver  ;  or  15  988-1000  pounds,  to  speak  accu- 
rately. This  change  increased  the  price  of  gold  at  the 
United  States  mints  (that  is,  less  gold  was  required  to  coin  a 
dollar)  to  the  extent  of  6  589-1000  per  cent.  The  value  of 
a  gold  dollar  coined  by  virtue  of  those  acts  was  thus  reduced 
to  that  extent.  The  effect  of  legislation  on  value  once 
more  became  apparent  soon  after  this  change  in  the  relative 
value  of  gold  and  silver  at  the  mints  in  this  country. 

American  legislation  decreed  that  about  sixteen  pounds 
of  silver  were  required  to  buy  one  pound  of  gold.  But  the 
mints  of  Europe  called  one  pound  of  gold  worth  only  151^ 
pounds  of  silver.  A  merchant  could  buy  a  pound  of  gold  in 
Europe  by  giving  15)^  pounds  of  silver  for  it  ;  he  could  then 
bring  that  pound  of  gold  to  this  country  and  sell  it  for  nearly 
16  pounds  of  silver.  After  paying  expenses  of  purchase, 
shipment  and  sale,  a  profit  could  be  made  by  buying  silver 
in  this  country  for  gold,  taking  the  silver  to  Europe  and  sell- 
ins:  it  there  for  gold. 


OPTION  OF  PA  YMENT. 


191 


RELATIVE   VALUE   OF    SILVER   AND    GOLD   DOLLARS. 

From  the  passage  of  the  act  of  1834  until  the  demonetiza- 
tion of  silver  in  1873,  the  silver  dollar  was  worth  a  little 
more  than  the  gold  dollar.  The  following  table,  furnished 
by  the  director  of  the  mint,  shows  the  relative  value  of  the 
silver  and  the  gold  dollar  from  1834  to  1873. 


< 

^a^^ 

X! 

=:5a.< 

< 

TO  _  < 

!U 

£;.2.c 

p 

■E.2.E' 

p 

£.2.^ 

n 

5  STf 

."■ 

i  »=''' 

"t 

S  F" 

I  0 

"to 

->  0 

=  2.^' 

5-°sr 

5'°,^ 

Gfq  41.  wi 

crq*.  <£. 

OfQ-t^  i£. 

2.S  r 

£.S  < 

2.S  5* 

p.»f  s 

Cents. 

Cents. 

Cents. 

1834 

101.62 

1848 

100.88 

1862 

104.16 

1835 

101.20 

1849 

101.30 

1863 

104.06 

1836 

101.72 

1850 

101.83 

1864 

104.06 

1837 

100.98 

I.S51 

103.42 

1865 

103.52 

1838 

100.88 

1852 

102.57 

1866 

103.63 

1839 

102.36 

1853 

104.26 

1867 

102.67 

1840 

102.36 

1854 

104.26 

1868 

102.57 

I  84 1 

101.88 

1855 

103-95 

1869 

102.47 

1842 

100.77 

1856 

103-95 

1870 

102.67 

1843 

100.34 

1857 

104.69 

1871 

102.57 

1844 

100.88 

1858 

103-95 

1872 

102.25 

1845 

100.46 

1859 

105.22 

i  1873 

100.46 

1846 

100.56 

i860 

104.58 

1847 

101.20 

1861 

103.10 

As  appears  from  the  foregoing  table,  gold  was  the  cheaper 
metal  for  the  entire  period  above  named  in  this  country. 
Meantime  gold  and  silver  at  the  ratio  of  15^  of  silver  to  one 
of  gold  circulated  at  an  equality  of  value  throughout  France, 
Germany  and  the  other  leading  nations  of  Europe. 


OPTION   OF   PAYMENT   BY    EITHER   GOLD    OR   SILVER. 

In  this  country  the  steadily  recognized  right  of  all  persons 
to  make  a  required  pa}'ment  of  "  dollars,"  either  in  silver  or 
in  gold  at  his  option,  caused  gold  to  be  generally  used  in 
place  of  silver.  No  outcry  was  raised  about  the  use  of 
"  cheap  money,"  and  no  one  was  accused  of  dishonesty  be- 
cause he  did  not  make  payments  in  siK'er, — the  most  valuable 


ig2 


SOCIAL  STRUGGLES. 


kind  of  money.  Compared  with  silver,  gold  was  "  depreci- 
ated," but  the  right  to  use  it  as  a  legal  tender  at  the  legal  rate 
of  :23  22-100  grains  of  pure  gold  was  unquestionable.  At  the 
same  time  the  right  of  any  one  to  pay  an  obligation  in  silver 
dollars  was  fully  established  both  by  law  and  by  public  senti- 
ment. That  comparatively  few  persons  did  so,  but  paid  in 
the  cheaper  metal,  did  not  in  the  least  affect  their  right  to 
make  such  a  payment  if  they  so  desired. 

The  reader  will  please  here  note  the  important  fact  that 
from  1792  up  to  1873  the  United  States  mints  were  open  for 
\\\Q  unlimited  coinage  oi  both  gold  and  silver.  Any  holder 
of  bullion,  no  matter  whether  it  was  gold  or  silver,  could 
send  it  to  the  mints  and  have  it  coined  at  the  public  expense 
into  the  standard  national  coins.  The  idea  of  limiting  the 
coinage  of  either  silver  or  gold  to  a  certain  amount  per 
month  was  unheard  of. 

How  this  ancient  and  established  order  of  things,  and  how 
the  moral  and  legal  right  of  all  persons  to  choose  in  which 
one  of  the  said  methods  they  would  make  a  payment  re- 
quired of  them,  came  to  be  changed  so  that  the  legal  right 
no  longer  existed,  we  will  next  consider. 

Before  proceeding  further  in  the  history  of  the  coinage 
legislation  of  this  country,  several  important  points  must  be 
noted  and  borne  in  mind. 

First.  Although  both  gold  and  silver  were  a  legal  tender 
for  all  purposes,  and  there  was  no  restriction  whatever  on 
the  coinage  of  either  metal  from  1792  to  1873,  yet,  in  fact, 
one  of  the  metals  was  constantly  used  as  money  more  than 
the  other.  The  other  metal  was  not  banished, — it  remained 
a  legal  tender  and  was  always  used  to  some  extent.  The 
metal  whose  bullion  value  was  lowest  was  employed  as 
money  far  more  than  the  metal  Avhose  bullion- value  for  the 
time  being  was  highest.     This  arose  from  two  facts. 

TENDENCY   OF    COMMERCE. 

Commerce  naturally  seeks  the  least  expensive  modes  of 
transaction.  The  fact  that  the  least  expensive  money  is  al- 
ways used  whenever  a  choice  is  possible  is  a  simple   thing 


ESTABLISHED  RIGHT  OF  ALL  PERSONS.  ig.? 

which   has     been   generally  treated   by  "economists"   as  a 
wonderful  law  of  finance. 

ESTABLISHED    RIGHT   OF   BOTH    CREDITORS   AND   DEBTORS. 

It  was  an  implied  part  of  every  contract  which  called  for 
the  payment  of  a  specified  number  of  "  dollars  "  that  those 
dollars  should  consist  of  either  one  of  the  legal-tender  mon- 
eys of  the  nation.  This  option  naturally  led  persons  who 
paid  money,  either  as  loans  or  in  payment  of  debts  of  any 
kind,  to  employ  the  kind  of  "dollars"  most  readily  ob- 
tained, and  these  w^re  usually  dollars  whose  bullion  value 
was  lowest. 

Second.  It  was  the  established  policy  of  the  country  to 
have  two  kinds  of  legal-tender  metallic  money.  The  object 
was,  by  having  a  larger  amount  and  variety  of  metal  from 
which  to  coin  money,  to  secure  a  greater  stability  of  the 
value  of  the  coins  than  was  possible  by  the  use  of  a  single 
metal.  It  is  more  difficult  to  overturn  a  body  with  a  large 
base  than  a  body  with  a  small  base.  A  small  body  of  water 
is  much  more  easily  raised  or  lowered  in  temperature  than  a 
large  body  of  water.  The  larger  the  amount  of  valuable 
metal  from  which  money  is  coined,  the  less  that  money  is 
liable  to  vary  in  \alue. 

Although  one  of  the  precious  metals  for  a  time  might  be 
in  use  as  money  to  only  a  small  extent,  yet  it  was  still  per- 
forming a  useful  function.  It  was  standing  guard  over  the 
fluctuations  in  value  of  the  metal  most  in  use,  ready  to  step 
in  and  fill  its  place  whenever  a  failure  of  mines,  or  an  in- 
creased demand  from  any  other  cause,  should  unduly  increase 
the  value  of  the  metal,  which  for  some  time  had  been  cheap- 
est and  most  generally  employed.  The  tendency  of  one  of 
a  pair  of'  precious  metals  to  act  as  a  balance^nd  check  on 
an  undue  rise  in  the  value  of  the  other  has  been  twice  illus- 
trated in  a  marked  manner  by  the  history  of  our  coinage. 

After  the  coinage  act  of  1834,  silver  rose  in  value,  but  no 
commercial  disturbance  occurred  in  consequence,  because  its 
fellow  metal,  gold,  at  once  came  into  circulation  and  stead- 
ied values.  After  1834,  owing  to  the  fact  that  silver  was 
13 


jg.  SOCIAL  STRUGGLES. 

worth  more  for  shipment  abroad  in  form  of  buUion  than  for 
coinage  in  the  standard  dollar  of  41 2>^  grains,  compara- 
tively little  silver  was  coined  at  the  United  States  mints. 

The  great  money-lenders  of  Europe  began  the  war  on  sil- 
ver at  the  Paris  convention  in  1867.  Thereafter  it  was  ap- 
prehended and  foreseen  that  legislation  would  soon  be  en- 
acted which  would  place  gold  under  such  difTerent  condi- 
tions from  what  had  existed  from  time  immemorial  that 
the  demand  for  it,  and  consequently  its  value,  would  be 
largely  increased. 

SILVER  COINAGE. 

In  1868  the  coinage  of  silver  dollars  at  the  United  States 
mints  was  54,800.  In  1869  the  value  of  gold  had  risen  to 
such  an  extent  that  silver  dollars,  to  a  greater  extent  than 
previously,  began  to  be  coined  at  the  United  States  mints, 
and  this  coinage  proceeded  as  follows : 

1869 231,350 

1870 588,308 

1871 657,929 

1872 1,112,961 

1873 977.150 

EFFECT   OF  DEMONETIZING   SILVER. 

It  zvill  be  observed  that  the  amount  of  eoinage  was  steadily 
increasing  until  1873,  zuhen  the  coinage  of  silver  dollars  was 
stopped.  The  law  stopping  the  coinage  of  silver  dollars  was 
passed  February  12,  1873.  The  above  figures  therefore  rep- 
resent only  a  fraction  of  1873.  There  is  every  reason  to 
believe  that  if  the  coinage  laws  had  not  been  tampered  with, 
the  coinage  of  silver  dollars  before  the  close  of  1875  would 
have  risen  to  forty  millions  per  annum.  Silver  coinage,  by 
diminishixig  the  demand  for  gold,  would  have  prevented  the 
value  of  gold  from  rising  to  the  price  it  reached  at  that  time 
and  soon  after.  This  would  have  saved  thousands  from 
bankruptcy  through  forced  sales  at  ruinously  low  prices. 
By  giving  stability  to  values,  it  would  have  averted  the  ap- 
prehension and  fear  of  the  future  which  paralyzed  enter- 


EQUAL  RIGHTS  TO  ALL. 


195 


prise  and  threw  labor  out  of  employment  in  1876,  1877  and 
1878. 

Third.  Prior  to  1873,  the  chief  argument  of  those  op- 
posed to  paper  money  was  a  recital  of  the  fact  that  as  the 
materials  from  which  gold  and  silver  coins  are  made  are 
limited  in  their  amount  by  nature,  the  value  of  metallic 
money  is  not  subject  to  the  caprice  of  legislators.  They 
said  :  "  Laws  can  readily  change  the  value  of  paper  money ; 
but  it  is  generally  admitted  that  legislators  have  no  right  to 
meddle  with  the  coinage  of  metallic  money,  and  thereby 
change  existing  contracts  to  the  detriment  of  either  debtor 
or  creditor." 

Fourth.  While  comparatively  few  persons  were  familiar 
with  the  fact  that  the  value  of  gold  and  silver,  like  all  other 
values,  is  dependent  entirely  on  surrounding  conditions  and 
circumstances,  and  that  changes  in  those  conditions  and 
circumstances  inevitably  produce  fluctuations  in  the  value 
of  those  metals,  it  was  universally  known  that  it  is  much 
easier  to  obtain  money  in  what  are  called  "  good  times  " 
than  in  periods  which  are  called  "  hard  times."  In  practi- 
cal application  of  the  foregoing  fact  it  was  an  implied 
part  of  every  contract  either  to  pay,  or  to  receive  money,  at 
a  specified  future  time,  that  both  parties  to  the  contract 
should  incur  an  equal  risk  of  the  money  being  hard  or  easy 
to  get,  and  therefore  more  or  less  valuable,  when  said  time 
arrived. 

CONTAGIOUSNESS   OF  VICE. 

No  disease  is  more  contagious  than  vice.  This  is  espe- 
cially so  when  vicious  desires  are  put  in  form  of  criminal 
acts,  and  these  acts  are  both  committed  and  sanctioned  by 
those  whom  the  majority  of  the  community  regard  as  the 
best  examples  of  rectitude.  In  1869,  as  we  have  heretofore 
seen,  Congress  changed  existing  contracts  and  thereby  com- 
mitted a  colossal  theft  at  the  instigation  of  holders  of 
United  States  bonds,  and  with  the  sanction  of  the  majority, 
who  claimed  to  be  actuated  by  the  purest  principles  of 
"  honesty."     The  profitable  result  of  this  transaction  nat- 


196  SOCIAL  STRUGGLES. 

urally  led  its  authors  and  their  imitators  to  consider  and 
devise  means  of  reaping  another  harvest  from  a  sim- 
ilar legislative  enactment  which  would  insidiously  change 
existing  contracts,  and  practically  carry  out  the  following 
ideas  proclaimed,  in  substance  by  the  organs  of  the  money- 
lenders : 

"  The  obligation  to  fulfill  contracts  does  not  apply  impartially  to  all  men 
under  all  circumstances.  The  debtor  and  the  tax-payer  are  always  bound 
to  pay  the  exact  number  of  dollars  named  in  the  contract ;  but  the  cred- 
itor has  a  right  to  go  to  Congress  and  promote  laws  which  will  change 
his  contract  whenever  events  make  it  less  advantageous  to  him.  than  he 
hoped  it  would  be  when  he  made  the  bargain.  The  risk,  which  everyone 
who  makes  a  contract  to  be  executed  in  the  future  inevitably  incurs,  that 
the  word  '  dollars '  shall  then  have  a  different  meaning,  should  be  borne 
only  by  the  debtor  and  the  tax-payer." 

FALSE   DOCTRINES   FRAMED   INTO   LAW. 

The  foregoing  detestable  ideas  were  slyly  incorporated 
into  Congressional  law  February  12,  1873,  by  the  cunning 
device  of  simply  omitting  from  the  revision  of  the  coinage 
laws  all  mention  of  the  silver  dollar.  President  Grant,  who 
signed  the  revision  in  order  to  make  it  a  law,  did  not  know 
that  silver  was  thereby  demonetized.  By  this  act  a  vast 
amount  of  existing  bonds,  mortgages  and  other  contracts, 
which  were  originally  payable  in  either  silver  dollars  or 
gold  dollars  at  the  option  of  the  debtor,  were  made  payable 
in  gold  dollars.  The  option  which  previously  existed  was 
canceled.  At  that  time  it  was  foreseen  that  silver  would 
soon  be  chosen  by  the  debtors  as  the  means  of  payment  if 
the  bargain  between  them  and  their  creditors  were  not 
altered  by  legislation,  and  emboldened  by  the  success  of 
the  act  of  March  18,  1869,  the  money-lending  interest  pro- 
cured the  foregoing  change  in  the  contract  existing  between 
them  and  their  debtors. 

This  change  of  law,  which  practically  was  a  theft  of  hun- 
dreds of  millions  of  dollars,  was  made  with  so  little  pub- 
licity that  not  one  person  in  a  hundred  thousand  had  knowl- 
edge of  it  until  long  afterward.  There  was  no  debate  on 
the  question,  and,  in  fact,  the  general  public  had  no  infor- 


WHO  ARE  GUILTY.  in -7 

mation  whatever  of  what  was  being  done.  The  statutes 
were  revised  in  the  committee  room  and  quietly  passed  by 
Congress.  Who  the  authors  of  this  plot  were,  we  do  not 
know.  But  their  existence  and  the  class  which  they  repre- 
sented can  be  stated  with  the  same  certainty  that  the  nat- 
uralist describes  birds  Avhose  foot-prints  before  historic  times 
were  left  on  the  sands.  The  natural  inference  as  to  who 
instigated  the  aforesaid  revision  is  conclusively  proved  cor- 
rect  by  the  known  facts  that  this  legislation  has  ever  since 
its  passage  been  approved  by  the  money-lenders. 

A  man  becomes  responsible  for  the  unauthorized  and 
wrongful  acts  of  his  servant  whenever  he  adopts  and  de" 
fends  them  as  his  own.  A  defender  of  unjust  legislation  is 
as  guilty  as  those  who  enacted  it. 

FUNDAMENTAL    FACTS   ABOUT   GOLD   AND   SILVER. 

Before  further  considering  the  justice  and  wisdom  of  de- 
monetizing silver  in  this  country  let  us  briefly  review  the 
events  in  European  countries  which  have  made  this  ques- 
tion of  such  great  importance. 

We  have  seen  that  up  to  1872  silver  and  gold,  at  the  ratio 
of  fifteen  and  one-half  ounces  of  silver  to  one  of  gold,  circu- 
lated at  an  equality  of  value  throughout  Europe.  In  this 
country,  at  the  ratio  of  nearly  sixteen  to  one,,  the  silver 
dollar  was  worth  a  little  more  than  the  gold  dollar.  At 
present  the  gold  dollar  is  worth  over  20  per  cent,  more 
than  the  silver  dollar.  WHiat  has  made  this  change  of  rel- 
ative value?  Prior  to  1872,  it  was  almost  universally  taught 
and  believed,  the  world  over,  that  silver  and  gold  had  a 
"  fixed  value."  Now  it  is  generally  stated  that  the  value 
of  silver  is  a  "  fluctuating  value."  If  silver  had  a  "  fixed 
value  "  for  centuries,  what  has  recently  made  it  fluctuate  in 
value  ? 

The  physical  qualities  of  both  silver  and  gold  are  pre- 
cisely the  same  as  they  were  at  the  earliest  period  of  which 
we  have  knowledge.  No  change  whatever  has  occurred  in 
the  inherent,  intrinsic  qualities  of  either  one  of  those  metals, 


198 


SOCIAL  STRUGGLES. 


and  therefore  the  change  in  their  relative  value  cannot  be 
due  to  such  a  cause. 

The  natural  laws  under  which  silver  and  gold  had  a  rel- 
ative value  prior  to  1872  are  unchanged  and  unchangeable. 
Natural  laws  are  never  repealed  either  in  whole  or  in  part. 
Consequently  we  must  dismiss  the  idea  that  a  natural  law 
gave  silver  a  "  fixed  intrinsic  value  "  up  to  1872,  and  since 
that  time  this  law  has  ceased  to  operate. 

Since  1872  there  has  been  no  materially  increased  pro- 
duction  of    silver.*     On   the    contrary,  many   silver  mines 

*  The  following  statements  and  tables  are  taken  from  a  pamphlet 
published  by  the  National  Bi-metallic  Coinage  Association,  1886. 

GOLD    AND    SILVER   PRODUCTION. 

'  The  advocates  of  the  single  gold  standard  have  within  the  past  few 
years  raised  the  cry  "  of  dearth  of  gold  and  abundance  of  silver."  To 
probe  the  truth  of  this  assertion  we  have  only  to  compare  the  gold  and 
silver  productions  in  past  times,  starting  our  investigation  and  comparison 
with  the  discovery  of  America,  A.  D.  1492- 

The  yearly  average,  according  to  the  best  authorities, — at  the  head  of 
which  Baron  Alexander  Von  Humboldt's  work,  "  Essai  sur  la  Nouvelle 
Espagne,"  stands,— was  about  5000  pounds  of  gold  and  20,000  pounds, 
avoirdupois,  of  silver  from  1493  to  1500. 

The  fairest  and  most  easily  comprehended  method  of  comparison 
would  therefore  be  in  groups  of  twenty  years. 

world's    production,  ESTIMATED    IN    POUNDS   FOR  TWENTY-YEAR 

PERIODS. 


1 501  to  1520 

1 52 1  to  1540 

1 541  to  1560 

1 56 1  to  1580 

1 581  to  1600 

1601  to  1620 

1621  to  1640 

1 641  to  1660 

1661  to  1680 

168 1  to  1700 

1701  to  1720 

1 72 1  to  1740 

1741  to  1760 


Avoirdupois 
pounds. 

255,200 
315,040 
374-440 
300,960 
324,560 
352,880 
365,200 
385,880 
407.440 
473,660 
564,080 
839,520 
1,082,840 


Avoirdupois 
pounds. 

1,880,000 

3,968,800 

13,710,400 

13,178,000 

18,431,600 

18,607,600 

17,318,400 

16,017,200 

14,828,000 

15,043,600 

15,646,400 

18,972,800 

23,458,380 


GOLD  AND  SILVER  PRODUCTION. 


199 


have  fallen  off  in  productiveness,  and  the  reports  of  enor- 
mous amounts  of  silver  ore  in  sight  in  the  Nevada  mines, 
which  were  published  from  1865  to  1869,  have  been  shown 
erroneous.  During  the  discussion  about  the  silver  bill  in 
1878,  its  opponents  gravely  stated  that  five  hundred  million 


1761  to  1780 

1 78 1  to  1800 

1801  to  1820 

1 82 1  to  1840 

1 841  to  i860 

1861  to  1880 


Avoirdupois 
pounds. 

911,020 

782,760 

564,542 

759,010 

5,633,988 

7,920,264 


Avoirdupois 
pounds. 

28,718,560 

38,678,000 

22,039,260 

30,291,690 

36,876,870 

69,012,574 


The  above  returns  show  plainly  that  the  production  of  gold  has  in- 
creased in  much  greater  ratio  than  that  of  silver.  Since  1741  to  1760, 
when  the  new  mines  of  Brazil  and  Bolivia  were  discovered,  up  to  the 
present  day,  the  production  of  gold  has  increased  sevenfold,  while  that  of 
silver  only  threefold. 

world's  production  of  precious  metals,  estimated   in  dol- 
lars  FOR  different   PERIODS. 

From  1 501  to  1883,  inclusive. 


I50I- 
I60I- 
I70I- 

I80I 

£851- 

1856- 

I86I- 

1866- 

I87I- 

1876 

1877 

1878 

1879 

1880 

I88I 

1882 

1883 


-1600 
-1700 
-1800 

-1850 

-1855 

-i860 
-1865 
-1870 

-1875 


383  years $7,180,252,387 


$478 

600 

1,272 

793 
661 
689 
619 
642 

57I: 
106 

113 
119^ 
108, 
106, 
103, 


,362 
,982, 
,36a 

.392, 
,286, 
,888 
788 
.481 
,416 
,286 

947 
092 

436 
023, 

699. 


94,027 


,240 
800 
480 
240 
880 
,880 
,480 
,200 
,480 
,588 

173 
786 
807 
786 
078 
588 
901 


PER  CENT. 


33-8 
27.2 

34-1 
35-9 
77-6 
77-9 
72.3 
69.0 

57-3 
517 
58.4 
55-7 
53-7 
52.4 
50.2 

47-3 
45.2 


$972,267,840 

1,608,690,240 

2,464,1 19,360 

1,413,666,000 

191,400,960 

195.478,320 

237,828,960 

289,248.480 

425,395,920 

99.305.538 

81,040,655 

94.882.177 

96.172,628 

96,704,978 

102,168,354 

109,952,251 

1 14.217.733 


66.2 
72.8 
65.9 
64.1 
22.4 
22.1 
27.7 
31.0 
42.7 

48.3 
41.6 

44-3 
46.3 
47.6 
49.8 
52.7 
54.8 


or  45.6  ,$8,592,540,394  I  or  54.4 


200 


SOCIAL  STRUGGLES. 


dollars'  worth  of  solid  silver  lay  exposed  in  the  Andes  ready 
to  be  sent  to  market  and  coined  as  soon  as  the  chaos-pro- 
ducing silver  bill  should  be  enacted.  But  nothing  has  been 
since  heard  of  this  great  mine.  Therefore  the  theory  that 
the  relative  fall  in  the  value  of  silver  is  due  to  an  increase 
in  the  production  of  silver  mines  must  be  placed  in  the  list 
of  fancies  unsupported  by  facts.* 


world's    production    of    gold    and   silver   for   383   YEARS,    ES- 
TIMATED IN    DOLLARS,    FOR   DIFFERENT    PERIODS    OF    TIME. 

From  1 501  to  1883,  inclusive. 


GOLD. 

PER  CENT. 

SILVER. 

PER  CENT. 

■^i;o  years 

$3,145,097,760 

3,184,861,920 

850,292,707 

32.8 
70.4 
51.8 

$6,458,743,440 

1,339.352,640 

794,444,314 

67.2 

25  years  

29.6 
48.2 

8  years  

•^S'?  years 

$7,180,252,387 

45.6 

$8,592,540,394 

54-4 

The  above  tables  show  •conclusively  that  the  total  production  of  gold 
since  1871  has  been  greater  than  the  production  of  silver  during  that 
time.  The  fact  of  a  relatively  small  increase  in  the  production  of  silver 
for  a  few  years  does  not  change  the  total  result.  Since  the  time  when 
the  silver  dollar  of  412-^  grs.  was  worth  2.57  per  cent,  more  as  bullion 
than  the  gold  dollar  of  25^^  grs.,  as  bullion,  the  relative  production  of 
those  metals  was  as  follows  : 

Production  of  gold  from  1871  to  1883 $1,421,709,187 

Production  of  silver  from  1871  to  1883 $1,219,840,234 

Said  figures  demonstrate  that  the  altered  relative  value  of  gold  and  silver 
is  due  to  the  altered  condition  produced  by  demonetizing  silver.    , 

See  statistics  published  in  report  of  United  States  Silver  Commission 
of  1877,  and  various  reports  of  the  director  of  the  United  States  Mint 
since  that  date.  Also  statements  of  the  Secretary  of  the  Treasury  made 
December,  1885,  in  appendix  of  this  volume. 

*  That  one  of  two  metals,  both  of  which  are  a  full  legal  tender  with 
unlimited  coinage,  may  be  enormously  increased  in  amount  without  suf- 
fering any  considerable  depreciation  in  value  relative  to  the  other  metal, 
is  fully  shown  by  the  results  which  have  occurred  at  different  periods 
after  the  world's  stock  of  the  precious  metals  has  alternately  been  in- 
creased by  the  addition  thereto  of  more  silver  than  gold,  or  more  gold 
than  silver. 

One  of  the  highest  authorities  on  the  precious  metals,  Prof.  William  P. 


FLUCTUATIONS  IN  VALUE  OF  SILVER.  20I 

Moreover,  if  such  increased  production  did  exist,  while  it 
would  produce  a  fall  in  the  value  of  silver,  it  could  have  no 
part  in  creating  the  new  feature  in  the  attributes  of  silver 
which  those  who  favor  gold  as  the  sole  currency  declare  its 
most  objectionable  quality ;  to  wit,  "  a  fluctuating  value.'' 
This  gives  us  a  greater  interest  in  finding  out  why  silver 
has  lately  taken  to  itself  a  quality  which  it  never  had  be- 
fore, than  to  know  why  it  has  fallen  relatively  in  value. 

We  look  in  vain    for  an  explanation  of  the   recent  facts 

Blake,  computes  the  total  production  of  gold  and  silver  throughout  the 
world  from  1848  to  1868  as  follows: 

Total  production  of  gold $2,757,600,000 

Total  production  of  silver 81 3,400,000 

Excess  of  gold  production $1,944,200,000 

By  reference  to  the  table,  published  by  the  director  of  the  United 
States  mint,  giving  the  relative  value  of  a  gold  dollar  of  25^  grs.,  and  a 
silver  dollar  of  41 2i  grs.,  at  those  periods,  we  find  the  relative  value  of 
those  coins  as  follows  :  Value  of  a  silver  dollar  of  41 2^  grs.  stated  in  gold, 
in  1848,  was  100.88,  and  102.57  in  1868. 

Thus  it  appears  that  the  production  of  over  nineteen  hundred  million 
dollars'  worth  of  gold,  from  1848  to  1868,  in  excess  of  the  production  of 
silver,  made  a  difference  in  the  relative  value  of  the  gold  and  the  silver 
dollar  of  only  one  and  sixty-nine  hundredths  per  cent. 

The  reason  of  this  fact  is  obvious  when  the  nature  of  value  is  borne  in 
mind.  So  long  as  both  metals  are  a  full  legal  tender  and  have  unlimited 
coinage,  they  both  perform  the  same  monetary  functions,  and,  as  the  raw 
material  of  money,  are  under  similar  conditions.  Relative  to  all  other 
commodities,  they  may  both  either  rise  or  fall  in  value,  while  their  re- 
spective values,  rclairve  to  each  other,  have  undergone  comparatively 
little  change.  Thus,  for  the  forty  years  immediately  preceding  1848, 
according  to  Prof.  Jevons,  both  gold  and  silver,  relative  to  all  other  com- 
modities, rose  145  per  cent,  in  value.  Meanwhile  their  value,  relative  to 
each  other,  was  substantially  unchanged. 

If  during  that  time  one  of  those  metals  had  been  generally  demone- 
tized, a  material  change  would  at  once  have  occurred  in  the  conditions 
under  which  it  was  placed,  and  a  wide  divergence  of  its  value,  relative  to 
the  other  metal,  would  have  inevitably  resulted  from  the  altered  condi- 
tions. 

From  1848  to  1868,  both  gold  and  silver,  relative  to  all  other  commod- 
ities, fell  over  20  per  cent,  in  value.     This  was  due  to  the  great  produc- 


202  SOCIAL  STRUGGLES. 

regarding  silver  until  we  turn  to  the  legislation  of  European 
countries.  We  then  find  a  series  of  enactments  which  took 
place  just  before  the  aforesaid  changes  in  the  relative  value 
of  silver,  and  we  observe  that  these  changes  became  more 
marked  just  in  proportion  to  the  number  and  power  of 
those  legislative  forces.  Cause  and  effect  are  closely  linked 
together;  and,  as  we  shall  hereafter  see,  the  probable  cause 
is  amply  sufficient  to  produce  the  obvious  effect. 

ATTEMPT   TO   DEMONETIZE   GOLD. 

Europe  is  mostly  governed  on  the  theory  that  the  rich 
and  the  privileged  should  make  and  administer  the  laws  for 
their  own  benefit  just  as  far  as  can  safely  be  done  without 
risk  of  goading  the  masses  of  the  population  to  desperation, 
and  thereby  bringing  on  a  revolution  which  might  endanger 
both  the  property  and  lives  of  those  now  the  dominant 
classes.  The  creditor  classes  make  the  laws  of  Europe. 
The  debtors  and  tax-payers  perform  most  of  the  labor,  and 
support  both  themselves  and  the  governing  classes. 

Shortly  after  the  discovery  of  gold  in  California  and  Aus- 
tralia, the  ruling  classes  of  Europe  became  anxious  lest 
that  event  should  impair  the  value  of  their  bonds,  and  thus 
lessen  the  amount  of  labor  and  tribute  rendered  them  in 
form  of  interest,  salaries  and  rents.  Hence  they  began  to 
devise  means  whereby  their  just  obligations  to  receive  a 
certain  amount  of  coin  in  payment  of  debts  could  be  repu- 
diated under  the  plausible  pretense  of  a  measure  for  "  the 
public  interest."  The  proposition  to  demonetize  gold  and 
make  silver  the  sole  lecral  tender  was  discussed  with  consid- 


tion  of  gold  during  that  period.  But,  as  heretofore  seen,  the  value  of 
those  metals,  relative  to  each  other,  underwent  comparatively  little 
change,  as  both  were  largely  under  similar  conditions ;  to  wit, 
legal  tender  with  unlimited  coinage.  An  increase  in  the  production  of 
gold  depreciated  the  value  of  silver  to  nearly  the  same  extent  that  it  did 
the  value  of  gold.  In  like  manner,  an  increased  production  of  silver 
would  have  nearly  the  same  effect  on  the  value  of  gold  as  on  the  value 
of  silver ;  provided  both  metals  were  full  legal  tenders  with  unlimited 
coinasre. 


INCREASED  USE  OF  GOLD. 


20S 


erable  prospect  of  its  general  adoption.  Holland  in  1847 
had  demonetized  gold.  Prussia  and  Austria  in  1857  prac- 
tically made  silver  their  sole  legal-tender  money.  The 
movement  for  the  demonetization  of  gold  would  probably 
have  become  general  throughout  Continental  Europe  had 
it  not  been  for  the  attitude  of  France.  That  nation 
retained  a  lively  remembrance  of  the  lurid  event  called  the 
French  Revolution,  when  the  masses,  maddened  by  oppres- 
sion, arose  and  spread  flame  and  carnage  through  the  land. 
France  retained  the  double  standard  of  both  gold  and  silver 
at  the  ratio  adopted  by  her  in  1 803,  to  wit:  one  of  gold  to 
I5>^  of  silver.  This  probably  saved  the  world  in  i860  from 
a  financial  crisis  caused  by  demonetizing  gold,  similar  to  the 
perturbations  now  existing  from  the  disuse  of  silver. 

In  1857  the  annual  production  of  gold  declined,  and  has 
on  the  average  declined  steadily  from  that  time  to  the 
present.  Knowledge  of  this  fact  has  stopped  all  agitation 
in  favor  of  making  silver  the  sole  legal  tender. 

PRESENT   CONSUMPTION   OF   GOLD   IN   THE   ARTS. 

Neither  the   production   of  gold,  nor  the  amount   of  it 
used  in  the  arts,  is  ever  accurately  known.     Our  knowledge 
of  such  things  is  necessarily  approximate.     But  from   the 
most  careful  estimates  made,  the  conclusion  is  reached  that      hd/^  ^-u^ 
the  annual  consumption  of  gold  in  the  arts  has  so  increased ^7^^^,^;^ 
that  it  now  equals^the  yearly  product  of  the  mines.     Thus    ' /  ^. 
the  constantly  increasing  growth  of  commerce  and  popula-  /^^ 

tion  is  not  met  with  a  corresponding  increase  in  the  m.etal 
which  several  nations  now  use  as  almost  the  sole  material 
from  which  to  manufacture  money. 

ORIGIN   OF   THE   WAR   ON   SILVER. 

In  1861  the  Nevada  silver  mines  attracted  attention,  and 
during  that  year  produced  about  two  million  dollars'  worth 
of  silver.  The  production  steadily  rose  until  1867,  when 
the  annual  product  reached  thirteen  and  a  half  millions. 
Coupled  with  this  actual  increase  of  silver  production,  the 
most  extravagant  reports  of  the  discovery  of  solid   masses 


204 


SOCIAL  STRUGGLES. 


of  silver  were  published.'"  These  statements  were  circu- 
lated in  Europe,  and  produced  a  profound  impression 
among  the  money-lenders. 

The  agitation  a  few  years  previously  in  favor  of  demone- 
tizing gold  had  attracted  their  attention  to  the  feasibility 
of  increasing  the  value  of  money  by  diminishing  the  num- 
ber of  metals  from  which  it  could  be  coined.  They  were 
somewhat  alarmed  ;  and  all  experience  tells  us  there  is  noth- 
ing at  once  so  unreasoning  and  so  remorseless  as  frightened 
selfishness.  The  tide  of  sentiment  among  the  ruling  classes, 
that  a  few  years  before  had  been  flowing  in  favor  of  demon- 
etizing gold,  now  turned  toward  striking  silver  out  of  the 
statute  books  as  a  legal-tender  money.  But  this  change 
was  one  of  form,  and  not  of  substance.  In  both  cases  the 
essence  and  intent  of  the  proposed  diminution  of  the  legal- 
tender  metals  was  to  add  to  the  wealth  of  the  creditor 
classes  by  making  money  and  obligations  to  pay  money 
more  valuable  by  lessening  the  volume  of  legal  coins. 

*  Mr.  Ross  Browne,  an  agent  of  the  United  States,  wrote  a  report  con- 
taining the  following : 

"The  time  is  not  far  distant  when  the  price  of  the  precious  met- 
als, as  compared  with  other  proceeds  of  human  labor,  must  fall.  The 
vast  improvements  that  have  been  made  both  in  gold  and  silver  mining, 

within  the  last  20  years,  are  applied  only  to  a  few  mines If  all  the 

argentiferous  lodes  of  Mexico,  Peru  and  Bolivia,  known  to  be  rich,  were 
worked  with  the  machinery  used  at  Washoe,  their  yield  would  really 
flood  the  world New  deposits  of  silver  will  be  found,  and  innu- 
merable rich  lodes  on  the  Pacific  slope  of  the  United  States,  not  yet 
opened,  will  be  worked  with  profit.  The  present  enhanced  prices  of 
commodities  and  labor,  the  world  over,  measure,  to  some  extent,  the  in- 
creasing quantity  and  consequent  depreciation  in  the  value  of  the  precious 

metals,  and  clearly  indicate  the  direction  the  change  is  taking 

These  two  streams  of  the  precious  metals,  poured  into  the  current  of 
commerce  in  full  volume,  will  produce  perturbations  marked  and  impor- 
tant  The  creditor,  public   and   private,  will  be   affected  by  this 

tendency." 

Events  have  conclusively  shown  the  gross  error  of  the  aforesaid  report. 


WA  YS  THA  T  ARE  DARK. 


AN   OLD    SUBTERFUGE. 


205 


In  1867  a  so-called  monetary  convention  was  held  in 
Paris.  The  ostensible  purpose  of  this  meeting  was  to  ena- 
ble scientific  men  to  confer  and  decide  what  constituted 
the  best  kind  of  money.  Its  real  purpose  was  to  create  a 
pretext  that  would  enable  the  ruling  classes,  under  the 
guise  of  a  scientific  reform,  to  make  gold  the  sole  legal- 
tender  coin,  and  thus  add  to  the  wealth  of  the  promoters  of 
this  "  scientific  "  scheme.  As  was  well  known  before  the 
convention  met,  the  so-called  "scientists,"  who  in  fact  were 
merely  the  servants  and  attorneys  of  the  money-lenders, 
found  that  gold  should  be  made  the  sole  legal  tender. 

Of  all  the  tricks  which  have  been  employed  in  this 
hypocritical  world  to  deceive  mankind,  that  of  calling  a 
meeting  of  pretended  authorities  on  a  certain  subject  for 
the  purpose  of  delivering  an  opinion  known  beforehand  by 
the  projectors  of  the  meeting,  is  at  once  the  most  frequent 
and  ancient.  Formerly,  chieftains  who  wanted  to  rob 
another  people  would  call  a  meeting  of  priests  under  pre- 
text of  a  desire  to  learn  whether  the  Lord  favored  their 
scheme.  These  conventions  invariably  found  an  exact 
coincidence  between  the  desires  of  their  masters  and  the 
mind  of  the  Supreme  Being.  Thereupon  the  enterprise 
was  pronounced  a  holy  war,  and  carried  on  with  great  zeal 
and  piety.  Recently,  great  crimes  have  been  committed 
and  justified  under  the  pretense  that  such  conduct  was  in 
accordance  with  the  most  profound  teachings  of  science, 
and  in  harmony  with  natural  laws  which  decree  the  "  sur- 
vival of  the  fittest." 

On  December  4,  1871,  Germany  began  to  incorporate 
the  doctrines  of  the  Paris  convention  into  law.  She  then 
stopped  the  coinage  of  silver  and  began  to  coin  gold.  July 
9,  1873,  another  lav/  was  passed  which  provided  that  after 
three  months'  notice,  thereafter  to  be  given,  gold  should  be 
the  sole  legal-tender  coin,  except  for  small  change.  The 
practical  effect  of  these  laws  was  an  immediate  change  in 
the  conditions  surrounding  gold  and  silver.     An  increased 


2o6  SOCIAL  STRUGGLES. 

demand  arose  for  gold,  and  this  at  once  increased  its  rela- 
tive value  as  compared  with  silver.  Prices  of  labor  and 
commodities  fell,  and  an  era  of  "  hard  times,"  from  which 
she  has  not  yet  recovered,  settled  upon  Germany. 

On  the  1 8th  of  December,  1872,  by  a  convention  between 
the  different  States,  Sweden,  Norway  and  Denmark 
adopted  gold  as  the  legal-tender  money  and  demonetized 
silver,  except  for  small  change.  Each  of  these  countries 
has  since  that  time  carried  out  the  provisions  of  said  con- 
vention. 

In  1876  Spain  announced  her  intention  to  make  gold  the 
legal-tender  money  of  that  country.  In  1874  the  Latin 
union,  composed  of  France,  Belgium,  Italy,  Switzerland 
and  Greece,  made  a  treaty  which  limited  the  coinage  of  sil- 
ver in  their  different  countries.  The  object  of  this  union 
appears  to  be  to  unite  those  nations  in  such  a  common  pol- 
icy regarding  coinage  as  events  may  make  appear  best  for 
the  interest  of  the  governing  classes  of  those  countries.  In 
1873  Holland  temporarily  suspended  silver  coinage.  She 
afterward  resumed  coinage  until  1875,  when  its  suspension 
was  ordered. 

Japan  has  also  recently  made  gold  the  national  money. 
A  large  amount  of  gold  will  continually  be  required  by  the 
millions  of  that  country. 

EFFECT   OF   LEGISLATION   ON   THE   VALUE   OF   A   DOLLAR. 

Let  US  now  consider  the  practical  effect  on  the  value  of 
gold  which  has  been  produced  by  the  aforesaid  legislation. 
In  order  to  do  this  we  must  first  consider  facts  which  deter- 
mine the  value  of  money. 

The  value  of  a  pound,  a  franc,  a  dollar,  or  any  other  one 
of  the  units  which  form  a  national  money  is  chiefly  deter- 
mined by  the  number  of  those  units  in  circulation.  An 
increase  in  the  total  amount  of  money  tends  to  diminish 
the  value  of  each  one  of  the  units  which  compose  it.  A 
diminution  in  the  total  amount  of  money  tends  to  increase 
the  value  of  each  one  of  the  units  of  which  the  money  con- 
sists.    Whether  these   units    be    called   pounds,    dollars  or 


RELATIVE  USE,  RELATIVE   VALUE. 


207 


any  other  name,  makes  no  difference  in  the  result  of  increas- 
ing or  diminishing  their  number. 

But  the  aforesaid  effects  are  produced  by  an  increase  or 
a  diminution  in  the  number  of  monetary  units  relative  to 
the  amount  of  business  they  are  used  to  transact.  If  the 
amount  of  money  in  a  certain  country,  or  in  the  world, 
remain  stationary,  and  the  population,  wealth  and  com- 
merce increase,  the  value  of  money  rises  because  its  amount 
is  lessened  relative  to  the  duties  it  performs.  Therefore  it 
follows  that  the  relation  zuhich  the  amount  of  money  in  a 
country  bears  to  its  use  is  the  dominant  thing  which 
determines  the  value  of  one  of  the  units  of  that  money. 
If  the  use  for  money  remain  stationary,  and  its  amount  be 
diminished,  the  value  of  the  remainder  is  enhanced.  If  the 
amount  of  money  be  increased  relative  to  the  demand  for  it, 
the  value  of  each  one  of  the  units  of  that  money  is  dimin- 
ished. The  absolute  amount  of  money  in  a  country  may 
be  increased  without  diminishing  the  value  of  each  one  of 
its  components,  provided  this  increase  coincides  with  an 
increase  in  the  wealth,  population  and  commerce  of  that 
country.  In  such  case,  the  relative  amount  of  money  is 
unchanged,  and  therefore  its  value  is  not  affected. 

VALUE   OF   ALL   THINGS    DEPENDENT   ON     THE    SAME   LAW. 

The  value  of  potatoes  depends  on  the  number  of  bushels 
in  market  relative  to  the  demand  for  them.  The  value 
of  the  units  which  form  -the  national  money  depends  on 
the  same  principles  as  the  value  of  potatoes. 

The  aforesaid  principles  and  facts,  and  kindred  ones 
which  flow  from  them,  arise  from  changes  in  the  conditions 
and  circumstances  under  which  money  is  placed.  If  ten 
men  be  required  to  properly  manage  a  ship  in  mid-ocean 
and  three  of  them  die,  additional  duties  are  thrown  on  the 
survivors  and  the  services  of  each  individual  becomes  more 
valuable.  On  the  other  hand,  if  thirteen  men  occupy  a 
place,  the  duties  of  which  can  readily  be  performed  by  ten, 
the  labor  of  each  one  of  the  thirteen  is  less  valuable  than  it 
would  be  if  he   performed  one-tenth  the   total  labor.     The 


2o8  SOCIAL  STRUGGLES. 

value  of  each  man's  service  depends  on  the  circumstances 
under  which  that  labor  is  performed,  and  a  similar  thing, 
for  a  kindred  reason,  is  true  of  the  value  of  each  one  of  the 
units  which  form  a  national  currency. 

The  control  of  legislation  over  the  value  of  money  arises 
from  the  power  to  change  the  conditions  which  surround  it 
by  increasing  or  diminishing  its  amount.  As  money  is 
used  to  compute  the  value  of  all  other  things,  it  follows 
that  legislation,  by  changing  the  relative  amount  of 
money,  can  affect  the  price  of  labor,  and  of  everything 
bought  and  sold  in  the  country  governed  by  such  legisla- 
tion. As  the  amount  of  debts  due  from  individuals, 
corporations,  municipalities  and  nations  is  constantly 
enormous,  and  as  the  obligations  which  represent  those 
debts  call  for  the  payment  of  a  certain  nuniher  of  units, 
without  regard  to  the  value  of  each  one  of  them,  it  also 
follows  that  any  material  change  in  the  value  of  money 
caused  by  legislative  enactment  is  always  a  legal  robbery  of 
either  the  creditor  or  the  debtor  class. 

AN   EXAMPLE   OF   LEGISLATIVE   THEFT. 

A  borrows  $1500  of  B  and  agrees  to  repay  him  ten  years 
thereafter.  When  the  loan  was  made  the  wages  of  a  com- 
mon laborer  were,  and  for  a  long  time  had  been,  $1.50  per 
day  and  wheat  was  worth  $1.50  per  bushel.  The  loan  there- 
fore represented  one  thousand  days'  wages,  or  one  thousand 
bushels  of  wheat. 

Before  the  ten  years  expire  silver  is  demonetized,  the 
number  of  coins  in  circulation  is  diminished  and  each  one 
of  those  remaining  becomes  scarcer  and  more  valuable. 
Wages  fall  to  one  dollar  per  day  and  wheat  to  one  dollar 
per  bushel.  When  the  debt  falls  due  it  represents  fifteen 
hundred  days'  labor,  or  fifteen  hundred  bushels  of  wheat. 
The  debtor  cannot  say  to  the  creditor:  "I  borrowed  the 
value  of  one  thousand  days'  labor,  or  one  thousand  bushels 
of  wheat.  A  thousand  dollars  will  now  buy  either  of  those 
things.  Here  are  your  thousand  dollars."  He  must  pay 
the  number  of  dollars  called  for  by  the  contract,  not  the 


A  SPEC/MEN  CONVERSA  TION. 


209 


amount  of  value  represented  by  those  dollars.  This  is  so 
simple  a  matter  that  it  is  strange  many  otherwise  intelli- 
gent people  are  puzzled  by  it. 

A   TALK   WITH   A   CLERGYMAN. 

Let  US  illustrate  this  by  an  actual  occurrence.  In  the 
winter  of  1877,  a  clergyman,  of  the  kind  usually  styled  "in- 
tellectual," asked  what  had  best  be  done  with  one  of  his 
debtors  who  had  recently  failed  to  pay  the  interest  on  a 
mortgage  which  the  reverend  gentleman  held  on  the  debt- 
or's house.  The  clergyman  said  :  "As  provisions,  clothing 
and  coal  are  all  cheaper  now  than  when  he  paid  his  interest, 
I  do  not  see  any. good  reason  for  such  neglect  of  duty." 

"  How  much  is  the  interest  on  your  mortgage?" 

"  Sixty  dollars  a  year ;  this  is  precisely  the  same  that  it 
was  when  it  was  promptly  paid." 

"  How  does  this  man  get  money?" 

"  He  has  a  horse  and  cart,  and  works  with  them  himself 
by  the  day." 

"  Then,  in  order  to  get  a  living  his  only  resource  is  to  sell 
his  own  labor  and  that  of  his  horse  from  day  to  day.  How 
much  did  he  daily  get  from  such  a  sale  when  the  loan  was 
made  ?  " 

"  I  never  thought  that  a  man  who  worked  for  wages  sold 
anything.  But  I  don't  know  but  it  is  so.  I  believe  he 
said  that  he  got  four  dollars  a  day,  and  so  I  thought  the 
loan  was  safe." 

"  Then,  when  he  got  the  money,  the  sale  of  fifteen  days' 
work  would  pay  a  year's  interest.  What  does  he  now  get 
from  the  sale  of  a  day's  wages  ?  " 

"  He  told  me  that  he  did  not  average  over  a  dollar  and  a 
half  a  day." 

"  Do  you  not  see  that  it  now  takes  forty  days'  labor  to 
pay  your  interest  instead  of  fifteen  days'  ?  " 

"  I  had  not  thought  of  the  matter  in  that  light.  But  you 
must  concede  that  it  does  not  cost  him  as  much  to  live  as  it 
did." 

"  It    is    true   that    his    expenses    cost    a   less    number  of 
14 


210  SOCIAL  STRUGGLES. 

'  dollars  '  than  they  did.  But  that  is  a  delusive  test.  The 
only  way  this  man  has  to  pay  his  expenses  is  from  the  sale 
of  his  labor.  He  cannot  sell  a  day's  labor  for  as  much,  and  as 
many,  of  the  necessaries  of  life  now  as  he  could  five  years 
ago.  Therefore,  his  living  costs  him,  of  what  he  has  for 
sale,  more  now  than  then.  Furthermore,  the  interest  must 
be  paid  from  what  is  left  after  the  things  absolutely 
needful  to  keep  himself  and  family  alive  are  first  paid  for." 

"  I  suspect  your  views  on  political  economy  are  new, 
and  not  in  harmony  with  established  authorities.  A  gold 
dollar  has  always  a  fixed  value." 

"  Can  your  debtor  get  as  many  gold  dollars  now  for  a 
week's  work  as  he  could  a  few  years  ago  ?  " 

"  I  believe  not.  But  that  has  nothing  to  do  with  the 
matter.  This  conversation  is  growing  unpleasant.  Good- 
morning." 

ONE   PURPOSE   UNDER   VARIOUS   PRETENSES. 

Under  various  pretexts,  silver  was  demonetized  both  in 
Europe  and  in  this  country  for  the  express  purpose  of  mak- 
ing the  remaining  money  more  valuable.*  The  practical  ef- 
fect was  precisely  the  same  as  would  have  occurred  if,  in- 
stead of  demonetizing  silver,  the  weight  of  both  the  silver 
and  the  gold  coins  had  been  increased.  An  increased 
amount  of  metal  in  each  coin  would  have  necessitated  a 
diminution  in  the  number  of  those  coins,  and  the  present 
results  would  have  been  produced  with  both  silver  and  gold 
coins  in  their  former  position  of  legal  tenders.  The  dis- 
honesty of  the  transaction  would  then  have  been  plainer 
than  at  present,  but  no  greater. 

*  A  large  number  of  persons  have  favored  making  gold  the  sole  legal 
tender,  without  any  desire  to  commit  an  injustice.  But  those  ignorant 
of  the  inevitable  result  of  such  a  measure  are  merely  private  soldiers  in 
an  army  whose  officers  have  a  definite  purpose  which  they  know  will  be 
accomplished  by  diminishing  the  amount  of  metal  from  which  legal 
tender  can  be  coined.  This  is  shown  by  the  pertinacity  with  which  they 
adhere  to  their  scheme  after  its  mischievous  nature  has  been  fully  dem- 
onstrated. 


DANGER  OF  ROBBING  OTHERS. 


211 


As  heretofore  stated,  it  was  formerly  held  sound  doctrine 
that  the  number,  and  therefore  the  value,  of  coins  could 
only  be  justly  modified  by  a  relative  increase  or  decrease  in 
the  amount  of  gold  and  silver  bullion  in  the  world ;  and 
that  the  risk  of  the  occurrence  of  one  or  other  of  these  con- 
tingencies should  be  borne  equally  by  all  parties  to  con- 
tracts to  be  executed  at  a  future  time.  Judging  from  the 
past  history  of  the  production  of  gold  and  silver  mines,  it 
was  deemed  improbable  that  such  semi-natural  causes 
would  occasion  any  change  in  the  value  of  either  gold  or 
silver  rapidly  enough  to  make  a  serious  difference  in  their 
value  within  a  few  years.  Upon  this  presumption,  coupled 
with  the  idea  that  legislative  interference  with  the  value  of 
coins  was  unlikely  to  occur,  lay  the  supposed  great  advan- 
tage of  a  metallic  over  a  paper  currency.  But  the  idea  that 
legislatures  should  not  meddle  with  the  value  of  coins  has 
recently  been  practically  abandoned. 

A   DOCTRINE   DANGEROUS   TO   CREDITORS. 

In  Europe,  under  the  thin  pretense  of  "  establishing  a 
scientific  currency,"  and  in  this  country  of  "honesty,"  the 
coinage  laws  have  been  changed  by  the  creditor  class, 
thereby  changing  and  repudiating  their  own  bargains  for 
the  sole  and  express  purpose  of  robbing  the  debtor  and  the 
laboring  classes.  The  old  idea  that  the  value  of  metallic 
money  was  not,  and  of  right  ought  not  to  be  dependent  on 
the  caprice  of  legislators  has  been  virtually  replaced  by  the 
doctrine  that  governments  of  right  ought  to  change  the 
value  of  metallic  money  whenever  in  their  judgment  such 
change  is  necessary  to  promote  the  interests  of  the  creditor 
class.  The  essence  of  all  the  clamor  which  is  raised  in  this 
country  for  "  honest  money  "  is  the  dangerous  doctrine 
that  the  majority  in  Congress  have  a  right  to  change  the 
standard  of  value,  and  enact  laws  which  will  legalize  rob- 
bery ;  provided,  it  be  done  in  the  interest  of  creditors  and 
under  pretense  of  "  honesty." 

If  the  class  in  control  of  the  Government  have  a  right 
to  do   as  they  hav^e  recently  done,  then   it  logically  follows 


212  SOCIAL  STRUGGLES. 

that  if  the  debtor  class  should  obtain  legal  power  it  would 
have  the  right  to  make  laws,  the  practical  effect  of  which 
would  be  to  rob  the  creditors.  With  justice  equal  to  the 
demonetization  of  silver,  the  debtors  might  enact  a  decrease 
in  the  weight,  and  consequently  an  increase  in  the  number, 
and  a  decrease  in  the  value  of  both  gold  and  silver  legal- 
tender  coins.  In  such  case  the  aforesaid  supposed  debt  of 
A  could  be  paid  with  seven  hundred  and  fifty  days'  labor, 
or  seven  hundred  and  fifty  bushels  of  wheat,  because  wages 
would  then  advance  to  two  dollars  per  day  and  wheat  to 
two  dollars  per  bushel,  or  perhaps  to  still  higher  prices. 

OUGHT   THE    SILVER   DOLLAR   TO   BE   MADE   HEAVIER? 

Without  having  studied  the  matter,  many  well  disposed 
people  have  been  led  by  plausible  arguments  to  favor  an  in- 
crease in  the  weight  of  the  silver  doll-ar  as  a  just  solution  of 
the  silver  problem.  The  exact  nature  of  this  proposition 
can  perhaps  be  more  easily  seen  by  using  an  example. 

Suppose  a  number  of  persons  should  contract  to  purchase 
one  hundred  million  bushels  of  wheat,  to  be  delivered  five 
years  hence  at  one  dollar  per  bushel.  Suppose  they  should, 
after  making  this  contract,  manipulate  legislation  and  have 
the  size  of  the  bushel  measure  increased  to  thirty-six  quarts, 
and  should  justify  their  conduct  by  saying  that  as  wheat 
had  fallen  in  value,  "  honesty,  morality  and  religion  "  sanc- 
tioned an  increase  in  the  size  of  a  bushel.  Suppose  the 
sellers  of  the  wheat  should  ask  for  a  restoration  of  the  old 
standard  and  the  buyers  should  then  call  them  ''  repudia- 
tors "  who  wanted  "cheap"  bushels.  Would  not  the 
sellers  of  the  wheat  justly  have  a  poor  opinion  of  the  hon- 
esty of  the  buyers?  Those  who  denounce  the  old  412% 
grain  dollar  act  precisely  as  the  buyers  in  the  above  sup- 
posed case.  They  want  to  change  the  size  of  the  bushel : 
they  ask  that  the  bargain  be  violated  and  more  grains  put 
in  place  of  the  agreed  number. 


JUSTICE  IS  THE  ONLY  SAFETY.  213 

DANGER   OF    ROBBING   DEBTORS. 

These  men  have  not  considered  what  results  might  flow 
from  the  success  of  their  schemes. 

If  Congress  can  justly  increase  the  weight  of  the  silver 
dollar,  it  has  a  right  to  increase  the  weight  of  the  gold  dol- 
lar. It  also  follows  that  Congress  has  a  right  to  diniinisJi 
the  weight  of  both  the  gold  and  the  silver  dollar. 

In  ofeneral  terms,  the  Southern  and  Western  States  are  the 
debtor  States ;  the  Eastern  States,  Pennsylvania  and  New 
York  are  the  creditor  States.  Suppose  the  debtor  States 
should  obtain  control  of  the  national  Government,  and, 
smarting  under  a  sense  of  unjust  dealing,  should  say  to  the 
creditor  States  :  "  Yoj.1  have  robbed  us  by  increasing  the 
value  of  coins.  You'  have  changed  the  meaning  of  the 
word  Mollar.'  Now,  to  make  things  equal,  we  will  give 
you  a  taste  of  your  own  medicine.  We  will  change  the 
meaning  of  the  word  dollar  in  our  interest." 

W^hen  a  class  in  control  of  the  Government  use  their  power 
for  the  purpose  of  legally  plundering  others,  they  have  no 
right  to  complain  if  the  tide  turn  and  the  robbed  becomes 
the  robber.     History  is  full  of  such  retribution. 

When  public  policy  requires  a  change  in  any  of  the  stand- 
ards of  coinage,  the  sanctity  of  existing  contracts  should  be 
respected  :  the  new  money  should  apply  only  to  new  con- 
tracts. If  this  obviously  just  principle  were  adopted,  and 
suitable  measures  taken  to  prevent  its  evasion  by  unscrupu- 
lous persons,  the  clamor  for  an  "honest  silver  dollar" 
would  immediately  end,  as  its  motive  would  be  gone. 

DEBT   NOT   DISREPUTABLE. 

For  the  past  twenty  years  a  persistent  effort  has  been 
made  to  covertly  teach  the  doctrine  that  it  is  disreputable 
to  be  in  debt,  and  that  therefore  the  laws  should  be  made 
to  aggrandize  creditors  at  the  expense  of  debtors.  Curi- 
ously enough,  these  doctrines  are  put  forth  by  men  who  are 
constantly  asserting  that  legislation  has  no  effect  upon 
value. 


\ 


214 


SOCIAL  STRUGGLES. 


No  one  can  borrow  without  some  one  will  lend.  If  the 
borrower  commit  a  wrong  by  so  doing,  the  lender  is  an 
equal  partaker  in  the  crime.  If  a  city,  a  State,  or  a  nation, 
do  a  disreputable  act  by  borrowing  money,  then  every 
owner  of  one  of  their  bonds  is  a  criminal. 

Commerce  and  industry  derive  a  great  impetus  from  the 
modern  system  of  banks,  by  means  of  which  small  sums  are 
aggregated,  and  then  loaned  to  industrious  and  skillful  per- 
sons in  need  of  additional  capital.  Banks  are  thus  the  tools 
for  collecting  little  rills  of  capital  and  uniting  them  into 
broad  streams  which  turn  the  wheels  of  trade.  What 
would  become  of  our  savings  banks  and  our  banks  of  de- 
posit if  no  one  would  borrow  their  money  ?  How  would 
the  orphan  and  the  widow  be  supported  if  no  one 
would  hire  the  money  which  a  provident  father  and  hus- 
band had  accumulated  for  them?  The  only  Avay  in  which 
a  person  can  live  in  a  civilized  country  and  not  either  di- 
rectly or  indirectly  sustain  the  relation  of  debtor  or  creditor, 
is  to  become  a  criminal  or  a  pauper  and  be  supported  by 
others.  The  cry  "  every  man  out  of  debt,"  if  not  a  delu- 
sion and  an  attempt  to  divert  attention  from  a  wrong, 
would  mean  a  return  to  barbarism. 

THE   TRUE   DOCTRINE. 

Equal  and  exact  justice  to  all  men  is  the  correct  doc- 
trine. Both  borrower  and  lender  should  have  equal  legal 
protection  as  both  relations  are  equally  meritorious.  Any 
means  whereby  debtors  or  tax-payers  are  made  to  pay  more 
than  they  agreed  to  are  therefore  just  as  wrongful  as 
measures  which  defraud  creditors. 

NOTHING    IS    MORE    DETESTABLE    THAN    HYPOCRISY. 

A  curious  trait  of  human  nature  almost  invariably  leads 
those  who  wrong  others  to  add  abuse  and  defamation  to 
the  wrong  committed.  This  is  apparently  done  to  afford  a 
pretext  and  justification  for  the  aggressor's  evil  acts.  The 
English  people  recently  added  one  to  the  thousands  of  pre- 
viouslv  existine  illustrations  of  this  isnoble  characteristic  of 


MEANNESS  OF  HYPOCRITES. 


215 


mankind.  They  sent  their  army  into  Africa  on  an  errand 
of  robbery  and  murder,  and,  not  content  with  this,  the  Eng- 
lish press  styled  the  men  who  were  fighting  against  pirates 
for  the  protection  of  their  homes  and  country,  "  barbarous 
rebels"  and  "  ignorant  fanatics," 

Mr.  Rogers,  in  his  scholarly  "  History  of  WorH  and  Wages 
in  England,"  accurately  describes  this  form  of  hypocrisy  in 
saying :  "  The  charge  of  setting  class  against  class  has 
always  been  made  by  those  who  wish  to  disguise  their  own 
indefensible  advantages  by  calumniating  the  efforts  of  those 
who  discover  abuses  and  strive  to  rectify  them.  Liberty 
and  property,  the  two  conditions  of  social  order,  have  been 
invoked  as  names  by  those  who  know  nothing  of  any  lib- 
erty but  their  own  privilege  to  do  wrong,  and  no  property 
but  that  which  custom  has  allowed  them  to  appropriate." 

THE   CRY   FOR   HONESTY. 

Those  who  have,  for  the  past  twenty  years,  been  at  work 
altering  bonds  justly  payable  in  greenbacks  into  bonds 
payable  in  coin,  and  changing  contracts  by  demonetizing 
silver,  thus  legally  robbing  debtors  and  tax-payers,  have 
kept  up  a  doleful  howl  about  the  '*  dishonesty  "  of  the  men 
they  were  intent  on  robbing.  A  desire  for  a  currency 
whose  value  is  as  stable  as  is  possible  to  create,  and  a  wil- 
lingness to  do  just  as  agreed  and  no  more,  have  been  de- 
nounced as  "  repudiation,  inflation  "  and  a  "  destruction 
of  national  credit."  Meanwhile  the  "  honesty  "  of  measures 
which  increased  the  burdens  of  debtors  and  tax-payers  be- 
yond the  original  contract  has  been  loudly  proclaimed. 
This  din  of  sophistry  and  falsehood  has  confused  the  minds 
of  many  persons. 

Let  us  endeavor  to  make  this  matter  clear  by  an  illustra- 
tion which  is  a  faithful  picture  of  the  aforesaid  conduct. 
Suppose  a  man  should  lease  a  farm  for  fifty  years  at  a 
yearly  rental  of  two  hundred  bushels  of  wheat  or  four 
hundred  bushels  of  corn,  the  kind  of  grain  to  be  at 
the  option  of  the  tenant.  For  a  long  time  wheat  is  not 
worth    twice    as  much   as    corn,    and  the  rent  is    paid    in 


2i6  SOCIAL  STRUGGLES. 

wheat.  Finally,  in  consequence  of  a  great  demand  foi* 
wheat,  its  price  rises  so  high  that  four  hundred  bushels 
of  corn  are  worth  less  than  two  hundred  bushels  of  wheat. 
The  tenant  comes  to  pay  his  rent  and  brings  with  him  four 
hundred  bushels  of  corn.  Now,  suppose  the  landlord,  in- 
stead of  doing  as  he  agreed,  should  cry  out  :  "  What  a 
scoundrel  you  are  !  This  corn  is  dishonest  corn.  Corn 
has  begun  to  fluctuate  in  value.  Let  us  be  honest.  Let 
us  strike  corn  out  of  the  contract,  so  that  the  rent  shall 
hereafter  be  paid  in  wheat." 

The  farmer  naturally  objects  to  this  proposition,  and  then 
the  landlord  induces  Congress  to  pass  a  law,  the  practical 
effect  of  which  is  to  prevent  the  tenant  from  paying  his 
rent  in  anything  but  wheat,  although  events  have  made  it 
probable  that  wheat  will  continue  to  be  much  higher  than 
it  was  when  the  farm  was  first  hired. 

There  is  only  one  thing  lacking  in  this  hypothetical  case 
to  make  it  a  perfect  parallel  to  the  conduct  of  those  who 
have  procured  legislation  whereby  contracts  payable  either 
in  gold  or  silver,  at  the  debtor's  option,  were,  practically, 
made  payable  only  in  gold.  That  lacking  thing  would  be 
for  the  landlord  to  first  succeed  in  having  laws  passed  which 
would  increase  the  demand  for  wheat  and  thus  raise  its 
value,  and  then  get  other  laws  passed  which  would  prevent 
the  debtor  from  paying  his  rent  in  corn. 

The  cry  for  the  stoppage  of  silver  coinage  comes  from 
those  creditors  who  want  to  strike  the  •  silver  corn  out  of 
the  contract  and  compel  the  debtors  and  tax-payers  to  pay 
the  golden  wheat.  They  want  legislation  which  will  save 
them  from  the  necessity  of  doing  as  they  have  agreed. 

If  the  creditors  have  a  right  to  go  to  Congress  and  ask 
protection  against  the  silver  dollar  because  recent  events 
have  lowered  its  relative  value,  is  it  not  certain  that  the 
debtors  and  tax-payers  have  an  equal  right  to  protection 
against  the  gold  dollar  which  has  been  raised  in  value  ? 
Every  one  will  admit  that  it  would  be  wrong  to  directly 
increase  the  value  of  a  gold  dollar  by  increasing  its  weight. 
Therefore,  is  it  not  equally  wrong  to  raise  the  weight  of  a 


INCONVENIENCE  OF  BOTH  GOLD  AND  SILVER. 


217 


gold  dollar  indirectly  by  striking  silver  from  its  ancient 
place  as  a  legal  tender,  thereby  changing  the  conditions 
under  which  gold  is  placed,  and  largely  increasing  its  value  ? 

GROUNDLESS   CHARGES   AGAINST   SILVER. 

In  1871  Germany  began  the  war  against  silver  on  the 
plea  of  wishing  to  create  for  the  Empire  "  a  single  standard 
which  should  have  a  fixed  and  unvarying  value."  The  na- 
tions who  followed  the  course  of  Germany  did  so  on  the 
assumption  that  a  currency  of  gold  protected  them  from  the 
"  fluctuations  in  value  "  to  which  silver  had  become  subject 
since  Germany  struck  it  from  her  statute  books  as  a  legal 
tender.  Those  who  advocate  the  policy  of  the  United 
States  demonetizing  silver  rest  their  case  almost  entirely 
upon  the  alleged  fluctuations  in  the  value  of  silver  and  the 
stability  of  the  value  of  gold. 

The  fact  that  a  million  dollars'  worth'  of  silver  is  about 
sixteen  times  as  heavy  as  a  million  dollars'  worth  of  gold  is 
virtually  conceded  to  be  of  little  importance,  for  two  rea- 
sons :  First.  Although  silver  is  much  the  heaviest,  it  costs 
but  little  more  to  transport  it  from  place  to  place  than  it 
does  to  carry  the  same  value  in  gold.  The  increased  weight 
is  counterbalanced  by  the  diminished  danger  of  theft. 
A  thief  could  readily  seize  five  thousand  dollars'  worth  of 
gold  coins  and  escape  with  them  ;  but  five  thousand  silver 
dollars  would  encumber  him  enough  to  make  his  capture 
easy. 

Second.  The  bulk  and  weight  of  silver  is  readily  obviated 
by  depositing  it  in  the  Treasury  vaults  and  issuing  paper 
certificates  therefor.  These  do  not  weigh  any  more  and 
are  just  as  convenient  to  use  as  certificates  paj^able  in  gold. 
A  paper  certificate  for  the  payment  of  twenty  silver  dol- 
lars is  far  more  convenient  than  a  twenty-dollar  gold  coin, 
and  is  far  more  secure  against  the  devices  of  counterfeiters. 

WHY   SILVER   DOES   NOT   CIRCULATE. 

A  great  outcry  has  been  made  by  the  enemies  of  silver 
that  the  silver  dollar  does  not  circulate  because  of  its  in- 


2i8  SOCIAL  STRUGGLES. 

convenient  size  and  weight.  This  is  a  dishonest  quibble. 
The  plain  fact  is  that  the  gold  dollar  does  not  circulate  any 
more  freely  than  the  silver  dollar.  The  people  prefer  paper 
money  to  either  gold  or  silver.  In  England,  with  gold  the 
sole  legal  tender,  it  is  estimated  that  over  ninety-nine  per 
cent,  of  all  payments  are  made  without  using  gold. 

The  number  of  millions  of  silver  dollars  lying  idle  in  the 
Treasury  vaults  has  been  cited  a  multitude  of  times.  But 
candor  requires  that  with  this  undoubted  fact  two  other 
facts  should  be  stated.  First.  That  the  Secretaries  of  the 
Treasury  have  steadily  exerted  their  influence  to  hinder  the 
payment  from  the  Treasury  of  the  silver  dollar.  Second. 
That  while  the  amount  of  silver  dollars  lying  idle  in  the 
Treasury  has  been  large,  the  amount  of  idle  gold  has  been 
still  larger.  Every  argument  against  silver  on  the  score  of 
convenience  applies  to  gold,  although  not  to  so  great  an  ex- 
tent. But  the  use  of  gold  coins  to  any  considerable  extent 
as  money  is  inconvenient  and  entails  great  hazard,  both 
from  accidental  loss  and  from  theft. 

SUPERIORITY   OF   PAPER    MONEY. 

The  world  has  largely  outgrown  the  actual  handling  of 
gold  in  ordinary  commercial  transactions.  Whether  the 
sum  transferred  from  hand  to  hand  be  one  dollar  or  a  million 
dollars,  both  silver  and  gold  are  inferior  in  convenience  to 
paper  money. 

Prior  to  the  discovery  of  America,  the  invention  of  print- 
ing, and  before  the  beginning  of  what  Mr,  Lecky  calls  the 
"  industrial  age,"  the  bulk  of  commerce  was  carried  on  by 
barter,  and  by  a  metallic  currency.  But  as  soon  as  trade 
felt  the  quickening  force  of  new  ideas  and  inventions,  it  not 
only  became  difficult  to  transact  business  with  such  cum- 
brous mechanism,  but  this  difficulty  was  enormously  en- 
larged by  the  increased  ability  which  dishonest  men  pos- 
sessed to  debase  and  counterfeit  the  currency.  In  1609, 
the  evils  of  counterfeit,  worn  and  defaced  coins,  and  the 
labor,  expense  and  danger  attendant  upon  counting  and 
transferring  genuine  coins  became  so  great  that  the  Bank  of 


COUNTERFEIT  MONEY. 


219 


Amsterdam  was  established  in  what  was  then  one  of  the  chief 
commercial  cities  of  the  world.  This  was  a  bank  of  de- 
posit ;  it  received  all  kinds  of  coins,  ascertained  their  value, 
and  issued  paper  certificates  therefor.  Bank-notes  had  not 
come  into  use,  and  the  title  to  the  coin  was  transferred  upon 
the  books  of  the  bank.  Purchases  and  sales  were  made  by 
a  transfer  of  credits.  The  avowed  object  of  the  bank  was 
to  avoid  the  nuisance  of  debased  and  spurious  coins. 

An  immense  business  was  done  by  this  bank.  The 
amount  of  treasure  in  its  vaults  was  variously  estimated  at 
from  twenty-five  to  four  hundred  millions  of  dollars  ;  but 
as  public  scrutiny  of  its  affairs  was  not  allowed,  no  one 
knew  how  much  coin  it  really  held.  The  commercial 
world,  however,  had  perfect  confidence  in  the  bank  until 
1790,  when  it  was  discovered  that  a  large  amount  of  Its  treas- 
ures had  been  loaned  fifty  years  before ;  and  that  the 
balance  had  been  steadily  diminishing  since  then,  so  that 
only  a  small  portion  remained.     The  bank  then  failed. 

For  the  long  time  during  which  the  credits  and  the  paper 
of  the  bank  had  little  coin  "  back  of  them,"  they  transacted 
an  immense  business  ;  hundreds  of  millions  were  bought 
and  sold  just  as  well  and  effectually  as  if  the  coin  had  been 
lying  in  the  bank  vaults.  Had  the  facts  not  become 
known,  the  bank  might  have  continued  doing  business  in 
that  way  for  all  time.  The  explanation  of  this  is  simple 
when  viewed  from  a  correct  standpoint.  The  credits  and 
the  paper  of  the  bank  were  not  used,  or  issued,  in  excess 
of  the  wants  of  trade  ;  they  were  limited  in  amount ;  they 
performed  the  same  functions  as  coin,  and  were  surrounded 
by  similar  conditions. 

Besides  its  superior  convenience,  paper  money,  es- 
pecially Government  paper  money,  has  another  great  advan- 
tage over  gold  coins,  viz.,  it  is  far  more  difficult  to  counter- 
feit. This  is  because  the  machinery  necessary  to  perform 
the  elaborate  and  delicate  engraving  on  paper  money  is  very 
expensive  and  ponderous,  and  can  neither  be  made  nor  ope- 
rated without  considerable  publicity.  A  single  bank  can 
easily  emit   notes  which  its  officials  will  readily  distinguish 


220  SOCIAL   STRUGGLES. 

from  spurious  imitations,  but  the  expense  of  making  bills 
so  that  the  whole  nation  will  be  protected  from  counterfeits 
is  so  great  that  the  tendency  is  for  banks  of  issue  to  avoid 
it,  except  only  so  far  as  is  thought  necessary  for  the  bank's 
self-interest.  Many  of  us  remember  when  a  counterfeit  de- 
tector was  part  of  the  furniture  of  every  ofifice,  store  and 
shop.  Since  our  paper  money  has  been  made  by  the  Gov- 
ernment, the  losses  of  the  people  from  counterfeit  currency 
have  been  trifhng  compared  with  what  they  were  before 
the  war.  As  protection  of  the  people  from  knaves  is  one  of 
the  chief  functions  of  Government,  it  follows  that  the  mak- 
ing of  paper  money  should  be  exclusively  in  its  hands. 
And  it  also  follows  that  after  it  has  incurred  the  great  ex- 
pense of  machinery  which  will  bid  defiance  to  counterfeit- 
ers, that  whatever  saving  or  gain  of  interest  may  result 
therefrom  belongs  to  the  Government,  and  not  to  any  class. 

As  an  argument  against  silver  it  is  stated  that  silver  has 
depreciated  since  1872,  and,  worse  than  that,  has  now  ob- 
tained "  a  fluctuating  value."  Curiously  enough,  none  of 
the  multitudes  who  accept  these  statements  as  true  have 
made  any  serious  attempt  to  explain  such  a  startling  phe- 
nomenon, but  have  passed  it  by  as  an  unknowable  freak  of 
natural  laws.  But  if  these  beliefs  be  true,  what  assurance 
have  we,  that  the  mysterious  fluctuations  which  to-day  exist 
in  silver  may  not  appear  in  gold  to-morrow? 

To  a  limited  extent  it  is  admitted  that  gold  may  slowly  un- 
dergo changes  which  in  course  of  time  may  make  a  material 
difference  in  its  value.  Thus,  Jevons,  a  standard  authority 
in  favor  of  gold,  tells  us  that  between  1789  and  1809  gold 
fell  forty-six  per  cent,  in  value,  and  from  1809  to  1849 
gold  rose  one  hundred  and  forty-five  per  cent.  The  last 
named  change  made  a  loan  borrowed  in  1809  and  repaid  in 
1849  cost  the  debtor,  besides  the  interest,  nearly  two  and  a 
half  times  the  value  of  the  original  sum. 

Thus  we  see  that,  by  one  of  their  own^  authorities  and 
partisans,  it  is  conceded  that  within  the  period  of  forty 
years  the  metal  which  is  constantly  spoken  of  as  having  a 
fixed  value  remained  nominally  at  par,  but  actually  rose  in 


THE  ROOT  OF  THE  MATTER.  221 

value  in  the  ratio  of  lOO  to  245.  Furthermore,  Jevons  tells 
us  that  in  a  few  years  after  1849  Z^^^  ^^^^  20  per  cent,  in 
value,  and  that  it  fluctuates  from  10  to  25  per  cent,  in  value 
during  every  panic. 

The  foregoing  sketch  of  the  various  reasons  advanced  for 
demonetizing  silver  brings  us  down  to  the  ultimate  point, 
the  decision  of  which  must  conclude  the  controversy  either 
in  favor  of  gold  alone  or  in  favor  of  both  gold  and  silver. 

THE   ESSENTIAL   ALLEGATION   IN   FAVOR   OF   GOLD. 

Omitting,  as  unworthy  of  debate,  the  superstition  that 
gold  constitutes  the  only  real  wealth  and  has  a  supernatural 
influence  on  sellers  of  goods,  the  claim  in  behalf  of  making 
it  the  sole  legal  tender  is  in  reality  narrowed  down  to  this 
proposition  :  "  Gold  has  a  fixed  value  over  which  legislation 
has  no  influence.  Gold  is  endowed  with  mysterious  quali- 
ties which  exempt  it  from  the  natural  laws  whose  influence 
is  constantly  raising  and  lowering  the  value  of  all  other 
things."  In  the  language  of  David  A.  Wells,  a  prominent 
writer  in  favor  of  a  gold  currency,  "  the  gold  dollar  is  the 
dollar  that  is  always  at  par." 

There  are  a  few  persohs  in  favor  of  gold  as  the  only  legal 
tender  who  concede  that  changes  occur  in  the  value  of 
gold,  computed  through  long  periods,  and  in  exceptional 
times.  But  even  these  individuals  mostly  fail  to  recognize 
that  the  natural  laws  which  produce  changes  in  value  are 
constant  and  universal.  Moreover,  the  aforesaid  admitted 
changes  in  the  value  of  gold  are  inconvenient  facts  which 
those  in  favor  of  "  honesty  and  honest  money  "  carefully 
conceal  from  public  knowledge.  On  the  contrary,  it  is  virt- 
ually assumed  by  the  majority  of  bankers,  legislators  and 
public  writers,  especially  so  by  the  religious  press,  that  gold 
is  exempt  from  the  constant  fluctuations  in  value  which 
natural  laws  create  in  all  other  things.  The  demonetization 
of  silver  is  demanded  on  the  ground  that  it  "  fluctuates  in 
value,"  while  gold  has  an  "  unvarying  value." 

Shall  we  examine  this  dogma  or  blindly  accept  it  as 
true  ? 


222 


SOCIAL  STRUGGLES. 


HAS   GOLD   A   FIXED   VALUE? 


We  have  now  arrived  at  the  most  important  question  in 
the  whole  range  of  the  problems  of  political  economy  under 
debate,  to  wit :  Are  the  aforesaid  allegations,  on  which 
those  in  favor  of  demonetizing  silver  rest  their  case,  true  ? 
If  they  be,  then  it  inevitably  follows  that  silver  should  be 
discarded,  and  there  is  no  propriety  in  using  it  even  for 
small  change.  But  if  these  fundamental  propositions  be 
false,  then  the  whole  system  which  rests  upon  an  assump- 
tion of  their  truth  must  be  false  also. 

Strange  as  it  may  seem,  to  this  central  point  the  vast  ma- 
jority, both  of  the  public  and  of  writers,  have  paid  no  atten- 
tion whatever.  But  the  financial  policy  of  nations,  the  rel- 
ative value  of  a  vast  amount  of  property,  and  the  welfare  of 
many  millions  of  people  are  all  materially  affected,  either  for 
good  or  for  evil,  by  its  decision. 

Let  us  now  dissect  the  aforesaid  assumptions  and  try  to 
discover  what  really  are  the  fundamental  facts  and  principles 
which  underlie  this  whole  subject.  We  can  then  reason 
from  facts  and  build  upon  a  good  foundation. 

THE    BULLION    REPORT. 

In  examining  any  subject  or  thing,  the  proper  course  is 
to  take  advantage  of  the  labors  of  predecessors.  Therefore 
the  first  question  before  us  is  this  :  What  method  of  inves- 
tigation has  been  pursued  by  those  who  have  concluded 
that  gold  has  a  fixed  value;  that  silver,  prior  to  1872,  had 
also  a  fixed  value,  but  since  that  time  has  both  depreciated 
and  fluctuated  ? 

For  ten  years  immediately  succeeding  1808,  England  was 
the  theater  of  an  extended  debate  in  regard  to  her  currency. 
In  January,  1810,  Parliament  appointed  a  committee  to  in- 
quire into  the  permanence  of  the  value  of  gold  and  silver. 
This  committee  produced  the  famous  Bullion  Report  which 
was  published  in  August,  18 10,  and  debated  in  Parliament 
for  several  years  thereafter.  From  the  date  of  the  publi- 
cation of  this  report  to  the  present  time,  nothing  has  been 


ESSENCE  OF  THE  BULL/ON  REPORT.  223 

written  which  has  been  considered  by  the  advocates  of  me- 
tallic currency  so  high  and  conclusive  an  authority  as  that 
document.  It  is  therefore  presumptively  a  condensed 
statement  of  the  best  arguments  which  can  be  made  to  show 
that  gold  and  silver  have  an  invariable  value. 

The  essence  of  this  report,  and  of  the  speeches  in  sup- 
port of  it,  consists  of  this  proposition  : 

"  A  pound  of  coined  gold  is  always  worth  a  pound  of  gold  bullion  of 
the  same  fineness.  A  pound  of  coined  silver  is  always  worth  a  pound  of 
silver  bullion  of  the  same  fineness.  Therefore  gold  and  silver  coins 
have  an  invariable  and  determinate  value.  But  it  is  to  the  interest  of 
England  to  adopt  gold  as  the  sole  legal  tender,  except  for  small  change." 

The  reader  will  note  that  the  aforesaid  argument  is  ap- 
plied to  both  gold  and  silver.  But,  during  the  past  ten 
years,  those  who  insist  on  the  "  fixed  value  "  of  gold,  while 
continuing  to  regard  the  Bullion  Report  as  the  essence  of 
wisdom,  have  nevertheless  dropped  out  the  word  "  silver  " 
as  forming  no  part  of  it,  thus  ignoring  the  fact  that  every 
argument  of  the  Report  in  favor  of  gold  is  also  made  in 
favor  of  silver.  At  present,  the  central  point  of  all  argu- 
ments for  making  gold  the  sole  legal  tender  is  this :  "  A 
pound  of  gold  coins  is  of  the  same  value  as  a  pound  of  gold 
bullion  of  the  same  fineness ;  therefore  gold  has  a  fixed 
value." 

England  endorsed  the  Bullion  Report  as  the  height  of 
financial  science.  She  enacted  that  after  1816  gold,  except 
for  small  change,  should  be  the  sole  legal-tender  metal. 

Said  Report  and  the  action  taken  thereon  have  been  con- 
tinually cited  as  a  sufficient  argument  and  example  to  in- 
duce us  to  imitate  the  policy  of  England. 

But  when  we  apply  the  same  common-sense  principles  to 
this  matter  that  we  do  to  all  other  things,  we  discover  that 
the  aforesaid  profound  argument  in  favor  of  the  stability 
of  the  value  of  gold  is  a  mere  quibble.  The  same  process 
of  reasoning  would  prove  that  everything  whatsoever  has  a 
fixed  value. 


224  SOCIAL  STRUGGLES. 


FACTS     WHICH     OVERTHROW     THE    COMMON    THEORY     IN 
REGARD  TO  GOLD. 

At  the  same  time  and  place,  one  thing  is  always  worth 
precisely  as  much  as  another  thing  exactly  like  it.  At  the 
same  time  and  place,  one  gold  dollar  is  worth  another  gold 
dollar,  one  silver  dollar  is  worth  another  silver  dollar,  one 
cabbage  is  worth  another  cabbage  of  the  same  size  and 
quality,  and  one  pig  is  worth  as  much  as  another  pig  which 
is  precisely  like  it.  So  long  as  our  comparisons  of  value 
are  restricted  to  comparing  one  thing  with  the  value  of  a 
precisely  similar  thing,  we  shall  never  find  any  changes  in 
the  value  of  the  things  thus  compared. 

This  must  necessarily  be  so,  for  in  such  case  we  have,  in 
fact,  made  no  comparison  or  investigation  whatever.  We 
have  virtually  compared  a  thing  with  itself.  It  is  as  absurd 
as  if  a  man  on  being  sent  to  measure  the  length  of  a  stick 
of  timber  should  report  that  it  was  "  as  long  as  a  stick  of 
timber."  As  long  as  what  stick  of  timber?  "  Why,  it  is 
just  as  long  as  itself." 

ORIGIN   OF  A   BELIEF  IN   THE   FIXED   VALUE   OF   GOLD. 

The  inquiry  naturally  arises  :  What  has  made  it  possible 
for  large  numbers  of  otherwise  intelligent  men  to  adopt 
such  an  absurd  mode  of  comparing  values  as  that  aforesaid  ? 
With  equal  pertinency  the  same  question  could  be  asked 
in  regard  to  nearly  every  department  of  human  knowledge. 

A  physician  or  surgeon  who  should  now  treat  patients 
precisely  as  they  were  treated  by  the  most  distinguished 
and  able  medical  men  of  a  hundred  years  ago  would  soon 
find  himself  in  prison  for  malpractice  and  manslaughter. 
And  we  have  every  reason  to  suppose  those  gentlemen 
were  just  as  conscientious  as  the  practitioners  of  to-day. 

We  now  wonder  at  the  superstition  of  the  few  ignorant 
persons  who  believe  in  witchcraft.  But  it  is  only  about 
two  hundred  years  since  a  belief  in  witchcraft  was  almost 
universal  among  the  most  intelligent  people.  Within  that 
time,  the  President  of    Harvard  College  and  other  persons 


SLOW  GRO WTH  OF  KNO IVLEDGE.  225 

in  similar  high  positions  sanctioned  the  hanging  of  women 
and  other  persons  accused  of  deahng  with  evil  spirits. 

Within  the  lifetime  of  living  men,  the  possibility  of  a 
locomotive  and  a  steam-boat  was  denied  by  all  the  so- 
called  scientific  men  in  the  world. 

Compared  with  the  total  length  of  human  history,  it  is 
but  yesterday  since  it  was  universally  believed  that  the 
earth  stood  still  and  the  sun  moved  round  it.  Assuming 
that  this  fundamental  idea  was  correct,  for  thousands  of 
years  all  the  learned  astronomers  and  "  scientists  "  of  the 
world  were  at  work  trying  to  explain  the  various  phenom- 
ena of  the  heavens.  But  notwithstanding  the  fact  that 
these  learned  gentlemen  had  the  wisdom  of  "  conservatism," 
and  were  not  guilty  of  any  "  eccentricity  "  in  conducting 
their  investigations,  their  treatises  were  similar  to  much  of 
what  to-day  is  called  "  political  economy."  The  "  science  " 
of  astronomy  was  formerly  obscure,  pretentious,  and  con- 
tinually contradicted  by  facts.  In  truth,  it  was  not  a 
science.  No  sooner  was  a  new  theory  of  the  heavens  con- 
structed than  some  inharmonious  fact  would  appear,  and 
then  the  complex  theory  would  have  to  be  adjusted  on 
another  hypothesis.  At  length,  the  idea  of  inquiring  into 
the  truth  of  what  had  so  long  been  assumed  as  true  occurred 
to  Copernicus. 

Amazed  at  the  wonderful  results  which  floAved  from 
starting  with  the  idea  that  the  earth  revolved  and  the  sun 
stood  still,  he  spent  the  greater  portion  of  his  life  in  con- 
sideration, before  publishing  what  was  deemed  such  a 
"  crazy  theory."  In  1543  Copernicus  published  the  results 
of  his  prolonged  studies.  They  were  almost  universally 
pronounced  by  the  "scientists  "  of  that  day  as  the  work  of 
a  visionary. 

In  1616,  Galileo,  the  pupil  of  Copernicus,  was  tried  for 
the  offense  of  teaching  the  heresy  that  the  sun  stood  still, 
and  if  he  had  not  recanted,  would  probably  have  been 
tied  to  a  post  and  roasted  as  "an  agitator."  It  was  as- 
sumed that  Galileo  was  wrong,  simply  because  all  the  so- 
15 


226  SOCIAI.  STRUGGLES. 

called  scientific  authorities  for  ages  had  said  that  the  earth 
stood  still. 

A  short  time  ago,  a  colored  preacher  in  Virginia,  by  the 
name  of  Jasper,  created  a  sensation  throughout  the  country 
by  preaching  sermons  in  which  he  asserted  that  "  De  sun  do 
move."  Mr.  Jasper  thought  his  statements  proved  by 
citing  the  undoubted  facts  that  the  sun  does  appear  to 
move,  and  that  all  the  wisdom  of  the  world  until  lately  said 
that  the  earth  stood  still  and  the  sun  moved. 

In  all  departments  of  knowledge,  it  has  been  gradually 
demonstrated  that  a  belief  is  not  necessarily  true  simply 
because  it  has  been  deemed  so  for  a  long  time  by  a  great 
number  of  persons. 

The  world  has  slowly  learned  that  Copernicus  and  Ga- 
lileo were  right ;  we  now  smile  at  the  ignorance  of  Jasper, 
but  we  should  remember  that  the  Rev.  Mr.  Jasper  uses  the 
same  form  of  reasoning  and  logic  to  show  that  the  earth 
stands  still  that  is  commonly  used  to  show  that  gold  stands 
still.  So  long  as  we  measure  and  compare  the  earth  only 
with  itself,  it  certainly  does  appear  to  stand  still,  and  the 
sun  to  move  through  the  heavens.  The  truth  can  only  be 
reached  by  comparing  the  earth  with  other  planets  besides 
itself. 

BY  COMPARISON  WITH  THINGS  OTHER  THAN  ITSELF  IS  THE 
ONLY  WAY  IN  WHICH  WE  CAN  ASCERTAIN  AND  STATE 
ANY   OF   THE   QUALITIES   OF   ANY   OBJECT   OR   THING. 

When  we  wish  to  ascertain  or  state  the  color  of  an  object, 
we  do  not  compare  its  color  with  its  own  color.  We  com- 
pare it  with  the  colors  of  the  rainbow.  When  we  wish  to 
determine  the  weight  of  a  ham,  we  do  not  put  a  similar 
ham  in  the  other  side  of  the  scales.  We  learn  its  weight 
by  comparing  it  with  a  pound  weight.  When  we  wish  to 
determine  the  form  of  an  object,  we  do  not  compare  it  with 
itself.  We  compare  it  with  geometric  lines  and  figures. 
When  we  wish  to  determine  the  value  of  a  pig,  we  do  not 
simply  compare  it  with  the  value  of  another  precisely  sim- 


HOW  WE  LEARN  VALUES. 


227 


ilar  pig.  We  compare  it  with  the  value  of  a  dollar,  or 
something  else. 

Thus  we  say  :  This  pig  is  worth  five  dollars ;  meaning 
thereby  to  state  our  opinion  that  the  pig  is  worth  five 
times  as  much  as  one  dollar.  Or,  in  like  manner,  we  may 
compare  the  pig  with  some  other  animal  or  thing. 

In  fact,  with  the  exception  of  gold  and  silver,  it  has  long 
been  a  universally  recognized  principle  that  the  only  proper 
way  to  ascertain  any  of  the  qualities  of  anything  whatso- 
ever is  to  compare  it,  not  with  itself,  but  with  some  other 
object  or  thing. 

But,  singularly  enough,  the  vast  majority  of  mankind 
have  failed  to  see  the  plain  fact  that  those  metals  are 
governed  by  the  same  natural  laws,  and  therefore  should  be 
submitted  to  the  same  methods  we  employ  in  testing  the 
various  qualities  of  all  other  things.  Within  the  past  fif- 
teen years,  this  ancient  custom  has  been  modified.  Silver 
is  not  now  tested  by  comparing  its  value  with  that  of  itself. 
But  the  value  of  gold  is  still  estimated  by  the  old  way  of 
comparing  gold  with  gold. 

ALL   IDEAS   ARE   RELATIVE. 

Experience  and  reason  have  taught  us  that  all  ideas 
respecting  the  qualities  of  everything  are  relative.  When 
we  say  that  a  certain  thing  is  long  or  short,  heavy  or  light, 
hard  or  soft,  or  that  it  has  any  other  quality,  the  statement 
always  involves  a  comparison  of  that  thing  with  something 
else.  Very  solid  butter  is  often  called  "  as  hard  as  a  stone." 
When  butter  is  quite  soft,  we  do  not  say  :  "  As  soft  as 
butter,"  but  the  expression  is  often  used  :  "  This  butter  is 
as  soft  as  lard."  Cheese  is  sometimes  said  to  be  "  as  soft 
and  rich  as  butter,"  and,  in  a  similar  manner,  we  compare 
the  qualities  of  one  thing,  not  with  the  qualities  of  the 
same  thing,  but  with  those  of  some  other  thing.  When  a 
surgeon  examines  an  arm  supposed  to  be  broken,  he  com- 
pares the  injured  arm  with  the  sound  one.  When  we  wish 
to  know  whether  a  column  of  mercury  is  rising  or  falling 
we  do  not  compare  it  with  another  similar  column  of  mer- 


228  SOCIAL  STRUGGLES. 

cury.  We  compare  it  with  the  glass  tube  which  contains 
it.  If  our  thermometers  had  two  tubes  alongside  of  each 
other,  and  if  the  mercury  in  one  tube  were  simply  compared 
with  the  mercury  in  the  other,  we  should  then  find  mer- 
cury, like  Mr.  Wells'  gold  dollar,  "always  at  par,"  For  at 
all  seasons,  the  apparent  height  of  a  column  of  mercury, 
tested  as  aforesaid,  would  be  unchanged. 

NEED    OF    COMPARING    ONE    THING    WITH    SOMETHING 
BESIDE   ITSELF. 

If  we  get  in  a  boat  floating  on  a  tide-water  stream,  it  is 
impossible  to  tell  whether  we  are  going  out  or  coming  in, 
or  in  fact,  whether  we  are  in  motion  or  remaining  in  one 
spot,  so  long  as  our  eyes  are  kept  fixed  upon  the  boat. 
The  facts  of  the  case  must  be  learned  by  comparing  the 
boat  with  something  besides  itself.  We  must  look  at  the 
bottom  of  the  stream,  at  the  shore,  or  at  some  other  object 
besides  the  one  we  are  resting  on  and  moving  with.  For  a 
similar  reason,  it  is  often  difficult  to  tell  whether  the  boat  you 
are  on  is  in  motion  or  the  boat  alongside  of  you.  Persons 
in  railroad  cars  at  depots  are  often  puzzled  to  know 
whether  their  train  has  started  or  not.  They  see  a  train 
alongside  of  them  in  apparent  motion,  and,  unless  they  see 
the  ground  or  buildings,  the  jarring  of  their  own  car  is  the 
only  way  of  deciding  whether  they  have  started  or  are 
being  passed  by  a  train  going  in  an  opposite  direction. 
This  arises  from  not  being  certain  that  they  are  comparing 
their  own  train  with  a  fixed  object ;  with  something  besides 
itself. 

No  one  can  deny  that  as  long  as  we  measure  the  length, 
weight  or  size  of  a  given  thing  by  a  precisely  similar  tiling, 
it  will  always  appear  unchanged.  For  example,  a  man  has 
an  iron  rod  one  hundred  feet  long,  and  he  wishes  to  learn 
whether  its  length  varies  at  ioo°  from  its  length  at  zero. 
If  he  measure  it  by  a  precisely  similar  rod,  exposed  to  the 
same  temperature,  it  will  appear  unchanged  and  unchange- 
able. But  the  moment  he  measures  it  by  other  things,  he 
discovers  a  material  change. 


LOGICAL  AND  ABSURD  CONCLUSIONS. 


229 


This  demonstrates  that  measuring  one  thing  by  compar- 
ing it  with  something  precisely  Hke  it  is  not,  in  reaHty,  a 
measurement  £lt  all,  because  no  new  facts  are  learned  by 
such  a  proceeding. 

VALUE  SHOULD  BE  TESTED  AS  ALL  OTHER  THINGS  ARE. 

No  valid  reason  can  be  given  showing  that  what  is  called 
"  value"  should  not  be  scrutinized  by  the  same  methods 
of  examination  which  experience  has  taught  us  are  the 
only  reliable  means  of  ascertaining  and  testing  other  attri- 
butes. All  other  qualities  of  any  given  thing  are  learned 
by  testing  and  comparing  them  with  the  qualities  of  some 
other  thing.  Hence  we  must  conclude  that  the  common 
mode  of  ascertaining  the  value  of  gold  by  simply  compar- 
ing it  with  itself,  is  delusive. 

We  are  told  that  gold  is  always  at  **  par."  We  ask  :  Par 
with  what  ?  The  answer  must  be :  Par  with  gold  ;  for  it 
must  always  be  at  par  when  compared  only  with  itself. 

If  an  advocate  of  the  idea  that  gold  has  a  fixed  value  be 
asked  to  state  the  evidence  that  gold  is  always  at  par,  he 
will  tell  you  that  it  is  proved  by  the  fact  that  a  piece  of 
gold  bullion  one  thousand  times  as  large  as  one  gold  dollar 
is  always  worth  one  thousand  gold  dollars. 

Under  free  coinage  this  must  be  so.  It  is  also  true  that, 
with  free  coinage,  a  bar  of  silver  bullion  one  thousand 
times  as  large  as  a  silver  dollar  is  always  worth  one  thou- 
sand silver  dollars.  If  we  coined  two-ounce  dollars  out  of 
copper,  without  charge  for  coinage,  we  should  find  that  un- 
der all  circumstances  two  thousand  ounces  of  copper  bullion 
were  always  worth  one  thousand  dollars,  so  long  as  wx 
stated  the  value  of  the  copper  bullion  in  copper  dollars. 

The  word  "  par  "  means  of  equal  value.  One  thing  at 
the  same  time  and  place  is  always  on  an  equality  of  value 
with  a  precisely  similar  thing.  Therefore  one  thing  at  the 
same  time  and  place  is  always  of  the  same  value  ;  /.  e.,  "al- 
ways at  par  "  with  a  similar  thing.  If  we  test  the  value  of 
potatoes  in  this  way,  we  shall  find  potatoes  "  always  at  par." 


230  SOCIAL  STRUGGLES. 

This  would  be  so,  because  one  bushel  of  potatoes  would  be 
worth  exactly  another  bushel,  at  the  same  time  and  place. 

The  mint  price  of  25  8-10  grains  of  standard  gold  is  one 
dollar,  paid  in  gold  ;  therefore  a  gold  dollar  is  always  the 
price  of  25  8-10  grains  of  standard  gold.  Suppose  the  mint 
price  of  one  hundred  grains  of  copper  were  one  dollar,  paid  in 
a  copper  dollar  of  one  hundred  grains.  Then  a  copper  dol- 
lar would  always  be  the  price  of  one  hundred  grains  of  cop- 
per, and  the  price  of  copper,  vicasiired  in  these  copper  dol- 
lars, would  always  be  the  same  ;  just  as  the  price  of  a  gold 
dollar  is  always  a  gold  dollar.  In  1859  gold  compared 
with  gold  was  at  par  ;  compared  with  the  silver  dollar  of 
4123^  grains  it  was  about  95.  Compared  with  itself,  gold 
is  now  at  par  just  as  it  was  in  1859,  but  compared  with  the 
bullion  value  of  the  silver  dollar,  gold  is  now  about  125.  In 
1859  silver  compared  with  itself  was  at  par  ;  it  now  stands  at 
the  same  point  as  it  did  in  1859,  provided  we  still  com- 
pare it  with  a  silver  dollar.  No  matter  of  what  materials 
dollars  are  made,  nor  how  many,  nor  how  few  in  number, 
they  will  always  be  at  "par  "so  long  as  compared  only 
with  themselves. 

But,  as  we  shall  hereafter  see,  this  fact  affords  no  infor- 
mation whatever  in  regard  to  the  actual  value  of  those  dol- 
lars ;  that  is,  their  value  tested  as  we  do  the  value  of  all 
other  things. 

LOGICAL   RESULTS   OF   COMPARING   GOLD   ONLY    WITH 

GOLD. 

Let  us  see  to  what  absurd  conclusions  we  are  driven 
whenever  we  adopt  the  so-called  "scientific"  method  of 
testing  the  value  of  gold,  and  follow  it  to  its  logical  and  in- 
evitable conclusions.  So  long  as  we  use  no  other  test  of 
value  but  to  estimate  the  value  of  23  22-100  grains  of  pure 
gold  at  one  dollar,  and  the  value  of  one  dollar  at  23  22-100 
grains  of  pure  gold,  neither  the  amount  of  gold  in  the 
world,  nor  the  greater  or  less  demand  for  it  for  coinage,  or 
any  other  purpose  whatever,   can   have  any  effect  on  the 


TRUE  TEST  OF  VALUE.  23 1 

value  of  gold.  It  would  always  be  worth  itself,  and  there- 
fore "  always  at  par." 

If  mines  were  discovered  which  yielded  a  thousand  mill- 
ion dollars'  worth  of  gold  bullion  annually,  gold  would  not 
fall  below  "par,"  simply  because  "par"  means  nothing 
more  nor  less  than  that  23  22-100  grains  of  pure  gold  is  one 
dollar  ;  and  one  dollar  is  23  22-100  grains  of  pure  gold. 

If  the  value  of  gold  be  not  changed  by  increased  supply, 
then  the  discovery  of  a  solid  mountain  of  gold  would  not 
affect  its  value ;  if  we  measured  gold  bullion  only  with 
gold  dollars  it  would  surely  remain  at  par.  On  the  other 
hand,  if  all  the  silver  in  the  world  were  destroyed,  so  that 
the  demand  for  gold  was  three  times  as  great  as  at  present, 
gold  would  not  rise  in  value, — it  would  remain  at  par. 
Even  if  all  the  silver  and  three-quarters  of  the  gold  were 
destroyed,  still  there  would  be  no  advance  in  the  price  of 
gold.  Moreover,  we  might  follow  out  this  process  until  the 
amount  of  gold  in  the  world  was  reduced  to  23  22-100 
grains.  We  should  then  find  this  solitary  dollar  still  only 
at  par,  because,  incas2ircd  only  by  itself,  it  would  have  the 
same  value  under  all  circumstances  ;  i.  e.,  it  would  be  worth 
as  much  as  itself,  neither  more  nor  less. 

RESULT   OF   UNLIMITED   COINAGE   OF   SILVER. 

Suppose  we  place  the  coinage  of  silver  on  the  same  basis 
that  the  coinage  of  gold  now  is,  and  thus  restore  silver  to 
the  position  it  had  up  to  1873.  We  should  then  find  silver 
dollars  at  par  with  silver  bullion,  and  silver  bullion  at  par 
with  silver  dollars. 

This  would  be  so  for  precisely  the  same  reason  that  gold 
bullion  is  now  at  par  with  gold  dollars.  If  a  man  own 
23,220  grains  of  pure  gold,  and,  without  expense  to  himself, 
can  have  them  coined  into  a  thousand  gold  dollars,  he 
knows  that  the  bullion  is  equal  in  value  to  a  thousand  gold 
dollars ;  and  he  also  knows  that  the  dollars  are  worth  as 
much  as  the  bullion. 

But  is  the  foregoing  fact  any  test  of  the  real  value  of 
gold?     We  have  simply  divided  a  lump  of  bullion  into  one 


232 


SOCIAL  STRUGGLES. 


thousand  equal  parts,  and  then  found  that  one  of  those 
parts  was  worth  one  thousandth  part  of  the  whole  lump. 
We  c^n  do  the  same  thing  with  silver,  or  any  other  divis- 
ible substance  or  thing,  and  always  arrive  at  the  same  re- 
sult. We  can  divide  a  bushel  of  wheat  into  thirty-two 
quarts.  We  shall  then  find  each  quart  worth  just  as  much 
as  another  quart,  and  the  thirty-two  quarts  put  together 
again  worth  just  as  much  as  a  bushel.  But  this  process 
does  not  determine  the  value,  either  of  a  quart,  or  of  a 
bushel  of  wheat.  It  is  simply  childish  folly,  but  essentially 
the  same  process  by  which  the  "  unvarying  value  of  a  gold 
dollar  "  is  arrived  at. 

We  do  not  need  to  be  told  that  one  quart  of  wheat  at 
the  same  time  and  place  is  worth  just  as  much  as  another 
quart  of  wheat  of  the  same  quality.  When  we  desire  to 
know  the  value  of  wheat,  we  want  its  relative  value  stated  ; 
i.  e.,  its  value  stated  in  some  other  commodity  or  thing  be- 
sides wheat. 

CORRECT   MODE   OF   STATING    THE  VALUE     OF    GOLD    AND 

SILVER. 

The  only  rational  way  to  test  the  value  of  gold  and  silver 
is  to  treat  them  just  as  we  do  everything  else  ;  i.  e.,  compare 
their  value  with  the  value  of  other  things, — state  their  rela- 
tive value. 

When  the  value  of  gold  is  under  consideration,  the 
proper  question  is  one  which  compares  it,  not  with  one,  but 
with  a  number  of  other  valuable  things.  What  are  the 
market  prices,  paid  in  gold,  of  wheat,  cotton,  wool,  iron, 
hemp,  corn,  pork,  beef,  sugar,  hardware,  clothing  and  labor? 
In  other  words,  what  is  the  relative  value  of  gold  compared 
with  the  value  of  the  various  articles  of  commerce  ?  Com- 
parison with  two  or  three  of  those  articles  might  be  mislead- 
ing, because  they  might  be  exceptionally  plenty  or  scarce. 
But  a  comparison  of  the  value  of  gold  bullion  with  the 
value  of  a  large  number  of  other  valuable  things  tells  us  at 
once  whether  gold  bullion  has  risen  or  fallen  in  value,  and, 
if  so,  to  what  extent.     In  like  manner,  a  comparison  of  the 


THE  KEY  TO  A  PROBLEM.  233 

value  of  silver  bullion  with  the  value  of  a  large  number  of 
other  valuable  things  tells  us,  with  unfailing  certainty, 
whether  silver  bullion  has  risen  or  fallen  in  value,  and,  if 
so,  to  what  extent.  By  this  means,  the  relative  value  of 
gold  or  silver  can  be  determined.  When  that  is  done,  we 
have  in  hand  a  key  which  will  unlock  the  problems  which 
bewilder  those  who  follow  round  and  round  the  narrow 
track  made  by  comparing  one  thing  with  a  precisely  similar 
thing. 

This  true  method  of  testing  value  is  called  ''  a  general 
pricing  of  commodities." 

WHAT   A   PRICE   IS. 

When  we  put  a  "  price  "  upon  a  thing,  we  thereby  state 
our  opinion  of  its  relative  value  compared  ivitJi  the  thing  in 
which  zve  state  the  price.  In  other  words,  two  things  are 
compared  with  each  other  and  the  "price  "  is  expressed  as 
the  result  of  the  comparison.  For  example,  in  a  commu- 
nity where  eggs  are  used  as  money,  a  farmer  takes  a  basket 
of  eggs  to  the  village  and  inquires  the  price  per  pound  of  a 
certain  kind  of  sugar.  He  is  told,  "  Half  a  dozen  eggs," 
This  is  equivalent  to  saying  that  the  price  of  eggs  is  two 
pounds  of  sugar,  per  dozen.  When  the  trade  is  completed, 
the  farmer  has  bought  sugar  and  the  grocer  has  bought 
eggs.  The  value  of  each  one  of  the  traded  commodities  is 
stated  by  comparing  it  with  the  other.  The  process  is  the 
same  as  if  the  price  of  the  sugar  were  stated  at  eight  cents 
a  pound,  and  the  price  of  the  eggs  at  sixteen  cents  a  dozen. 

When  a  grocer  exchanges  two  dollars  wnth  a  farmer  for 
ten  dozen  eggs,  we  ordinarily  say  that  the  grocer  has 
bought,  and  the  farmer  sold  eggs.  But  in  fact  the  grocer 
has  sold  his  money  just  as  truly  as  the  farmer  has  sold  his 
eggs.  And  the  farmer  has  bought  two  dollars  just  as  cer- 
tainly as  the  grocer  has  bought  ten  dozen  eggs.  While  we 
commonly  speak  of  the  "  prices  "  of  commodities,  by  so  do- 
ing we  also  virtually  speak  of  the  "  price  of  money." 

This  should  be  steadily  remembered,  as  it  is  very  impor- 
tant. 


234 


SOCIAL  STRUGGLES. 


MONEY   CHANGES   IN   PRICE   LIKE   OTHER  THINGS. 


Money  is  higher  priced,  when  a  less  amount  of  it  will  buy 
a  given  amount  of  the  necessaries  of  life.  Money  has  fallen 
in  value,  when  a  greater  amount  of  it  is  required  to  buy  a 
given  amount  of  a  considerable  number  of  the  leading  arti- 
cles of  commerce. 

A  farmer  takes  a  hundred  bushels  of  wheat  to  market  and 
sells  them  for  fifty  dollars.  He  has  then  bought  fifty  dol- 
lars and  paid  a  price  of  one  hundred  bushels  of  wheat  for 
them.  If  he  had  received  one  hundred  dollars  for  his  wheat, 
the  "price  "  of  each  one  of  those  dollars  would  have  been 
just  one  half  what  it  was.  In  the  aforesaid  case,  the  ques- 
tion arises :  Did  the  dollars  bring  a  high  price,  or  did  the 
wheat  bring  a  low  price  ?  So  long  as  our  field  of  observa- 
tion is  confined  to  the  facts  of  this  one  case  we  are  unable 
to  decide  those  questions.  The  only  way  to  determine  them 
is  to  test  and  compare  the  value  of  both  wheat  and  dollars 
by  comparing  each  and  both  of  them  with  a  number  of 
other  things.  If  the  price  of  a  considerable  number  of 
commodities,  on  the  average,  be  relatively  much  higher 
than  wheat  at  half  a  dollar  a  bushel,  we  know  that  special 
circumstances  have  lowered  the  value  of  wheat.  But  if  we 
find  that  the  prices  of  all  other  things,  on  an  average,  have 
sunk  to  the  relative  level  of  wheat,  then  we  know  that  half 
a  dollar  a  bushel  for  wheat  means  a  rise  in  the  value  of 
dollars. 

HOW   TO   TEST  THE   PRICE   OF    MONEY. 

The  average  scale  of  the  prices  of  a  considerable  number 
of  leading  commodities  denotes  the  price  of  money.  A  uni- 
versal rise  in  the  prices  of  all  kinds  of  goods  denotes  a  fall 
in  the  value  of  the  dollars  in  which  those  prices  are  stated. 
Dollars  are  cheaper  than  previously.  The  evidence  of  this 
is  the  fact  that  they  can  be  bought  with  a  smaller  amount 
of  other  valuable  property  Or  labor. 

A  general  lowering  of  the  scale  of  the  prices  of  commodi- 
ties and  labor  denotes  a  rise  in   the  value  of  the  dollars  in 


COMMON  SENSE. 


235 


which  those  prices  are  stated.  Dollars  are  dearer  than  they 
were.  The  evidence  of  this  is  the  fact  that  a  larger  amount 
of  other  property  is  required  to  buy  a  given  number  of  dol- 
lars than  before  the  change  occurred. 

THE   PRICE   OF   GOLD. 

Let  us  apply  the  foregoing  facts  and  principles  to  deter- 
mining whether  a  gold  dollar  has  a  fixed  value,  or  not.  If 
it  have  an  unvarying  value,  then  it  has  an  unvarying  price, 
because  a  price  is  simply  a  short  and  handy  way  of  stating 
our  ideas  of  value.  If  gold  dollars  have  an  unvarying  price, 
then  they  can  always  be  bought  with  the  same  amount  of 
other  property. 

The  fact  however  is,  that  on  the  average,  whoever  goes  in 
the  market  to  buy  gold  dollars  in  1886  finds  that  their  price 
is  over  twenty-five  pe-r  cent,  higher  than  in  1870.  In  other 
words,  over  twenty-five  per  cent,  more  of  labor  and  of  the 
various  products  of  labor,  on  the  average,  must  be  given  in 
1886  than  in  1870  to  buy.a  given  number  of  gold  dollars. 
The  price  of  gold  has  risen.  Instead  of  a  fixed  value  it  has 
an  unstable  value. 

Every  man  who  works  for  wages,  paid  in  gold  or  its  equiv- 
alent, buys  gold  and  pays  for  it  with  labor. 

Every  man  who  produces  any  one  of  the  various  forms  of 
wealth  and  sells  it  for  a  price  paid  in  gold  is  a  buyer  of  gold 
and  pays  for  it,  either  directly  or  indirectly,  with  labor. 

Every  man  who  is  obliged  to  sell  his  house  or  his  farm 
for  gold,  is  a  compulsory  buyer  of  gold,  and  receives  a 
smaller  amount  of  it  in  exchange  for  his  property  than  he 
would  if  gold  had  not  risen  in  price. 

The  owners  of  gold,  and  the  owners  of  bonds,  mortgages 
and  other  securities  which  are  made  payable  in  gold  by  mak- 
ing it,  in  effect,  the  sole  legal  tender,  have  a  far  greater  abil- 
ity to  control,  or  purchase  all  the  other  property  in  the  coun- 
try, in  consequence  of  this  rise  in  the  price  of  gold.  Such  a 
rise  also  gives  them  an  advantage  over  laborers  for  w^ages, 
because  the  laborer  must  sell  his  work  at  a  low  price  for 
gold  at  a  high  price.     This  increases  the  amount  of  tribute 


236 


SOCIAL  STRUGGLES. 


which  labor  is  compelled  to  pay  to  capital.  Suppose  a  man 
hold  a  hundred  thousand  dollars'  worth  of  bonds  or  mort- 
gages at  an  interest  of  six  thousand  dollars  per  year.  Labor 
is  then  two  dollars  per  day.  A  year's  interest  will  then  buy 
three  thousand  days'  labor. 

If  the  price  of  gold  rise  so  that  wages  fall  to  one  dollar 
per  day,  the  aforesaid  capitalist  would  be  able  to  buy  six 
thousand  days'  labor  with  a  year's  interest.  If  the  rate  of 
interest  fall  to  four  per  cent.,  he  will  still  be  able  to  buy  a 
thousand  days'  labor  more  than  he  formerly  could  with  his 
income. 

The  rate  of  interest  paid  during  recent  years  on  Govern- 
ment bonds  and  called  loans  does  not  correctly  indicate  the 
rate  of  interest  actually  paid  by  the  great  mass  of  debtors. 
The  great  bulk  of  existing  indebtedness  throughout  the  na- 
tion consists  of  personal  notes  and  mortgages  on  real  estate. 
On  many  of  these  instruments,  the  rate  of  interest  is  the 
same  as  it  was  in  1873.  In  cases  where  a  reduction  in  rate 
has  been  made,  this  reduction  has  not  equaled  the  fall  in 
the  prices  of  labor  and  its  products. 

CORRECT  TEST  OF  THE  RATE  OF  INTEREST. 

The  real  test  whether  interest  is  high  or  low  is :  How 
much  labor  does  the  man  who  borrows  money  have  to  ex- 
pend in  order  to  pay  the  interest  ?  The  four  per  cent. 
United  States  bonds  are  a  heavier  burden  on  the  American 
tax-payer  now  than  the  six  per  cent,  bonds  were  fifteen 
years  ago,  because  wages  have  been  reduced  and  our  ex- 
ports sell  for  much  lower  prices  in  gold  than  they  did  then. 
The  interest  on  loans  in  this  State  has  been  reduced  from 
seven  to  six  per  cent.,  but  in  reality  interest  is  higher  in- 
stead of  lower.  It  remains  at  this  high  rate  because  so  vnich 
debt  already  exists.  Were  it  not  for  the  vast  mass  of 
debts  from  which  debtors  cannot  immediately  escape, 
interest  would  at  once  fall  to  more  nearly  its  actual  value, 
and  the  property  of  the  country  would  cease  its  pres- 
ent   rapid  transfer  from  the  debtor  to  the  creditor   class. 


HO  W  B URDENS  ARE  INCREASED.  2  ^  7 

The  debtors  have  been  surprised  by  legislation  in  the   in- 
terest of  the  creditors. 

One  important  fact  in  this  connection  is  generally  over- 
looked by  those  who  have  written  about  the  present  situa- 
tion of  affairs.  Those  who  pay  interest  can  only  do  so 
permanently  from  their  savings.  A  reduction  of  wages  and 
prices  often  reduces  the  amount  possible  for  a  debtor  to 
save  far  more  than  the  fall  of  prices.  Thus,  if  a  farmer's 
products  be  reduced  twenty-five  per  cent,  in  price,  such  a 
reduction  may  reduce  his  profits  and  savings  fifty  per  cent. 

PUBLIC  DEBTS  AND  TAXES. 

Every  self-supporting  person  pays  taxes,  either  directly 
or  indirectly,  on  everything  he  uses  or  consumes.  Men  who 
pay  large  tax  bills  do  not,  as  a  general  rule,  pay  them  from 
their  own  property,  except  upon  and  for  such  portion  as 
they  personally  use  or  consume.  For  the  residue,  they  are 
merely  sub-collectors  of  taxes  from  their  tenants,  debtors  and 
employees. 

We  are  burdened  with  large  national,  State,  county  and 
city  debts.  The  interest  and  principal  of  these  debts  are 
paid  by  the  tax-payers.  The  rise  which  has  occurred  in  the 
value  of  gold  has  added  to  the  burden  of  this  debt  because 
it  takes  more  labor  to  pay  it  than  when  it  was  contracted, 
and  this  has  caused  increased  taxation  upon  every  consum- 
er. These  additional  taxes  have  been  levied  upon  laborers 
in  form  of  a  reduction  of  wages ;  the  laborer's  taxes  are 
thus  collected  every  time  a  week's  or  a  month's  wages  are 
paid  him.  Our  railroad  corporations  owe  enormous  debts. 
The  interest  and  principal  of  these  debts  are  paid  from 
freight  and  fare.  As  railroad  charges  are,  in  effect,  a  tax 
upon  everything  transported  by  those  roads,  every  self-sup- 
porting person  thus  indirectly  pays  a  tax  upon  whatever  lie 
uses  which  is  carried  by  rail. 

AN   EXAMPLE    OF   BENEVOLENCE. 

The  aforesaid  facts  explain  the  yearly  occurrence  in  this 
country  of  a  remarkable  example  of  unselfishness  and  piety. 


238 


SOCIAL  STRUGGLES. 


A  considerable  number  of  persons  travel  in  the  aggregate 
thousands  of  miles,  at  their  own  expense,  and  organize  into 
what  is  called  a  "  Bankers'  Convention."  The  persons 
composing  these  conventions  largely  represent  the  capital- 
ists and  money-lenders  of  the  nation.  They  never  exhibit 
the  slightest  desire  to  promote  the  selfish  interests  of  their 
own  class.  But,  on  the  contrary,  they  always  express  a 
great  solicitude  that  "  the  laboring  man "  should  be  well 
taken  care  of.  To  this  end  they  invariably  point  out  the 
injustice  of  paying  wages  in  anything  but  gold,  or  its 
equivalent  in  value  ! 

THE   TRUE   EXPLANATION. 

By  referring  to  the  fundamental  laws,  heretofore  stated, 
which  govern  the  creation  of  value,  we  find  a  complete  ex- 
planation of  the  recent  rise  in  the  value  of  gold.  We  have 
heretofore  found  that  all  values  are  the  result  of  certain 
conditions  and  circumstances,  and  that  therefore  the  value 
of  a  thing  must  necessarily  change  whenever  a  change  oc- 
curs in  the  conditions  and  circumstances  which  created 
that  value. 

WHAT   HAS   CHANGED   THE   VALUE   OF   GOLD. 

Since  1872,  four  important  changes  have  taken  place  in 
the  conditions  under  which  gold  is  placed.  First.  An  in- 
creased demand  for  gold  to  fill  the  place  previously  occu- 
pied by  paper  money  and  by  silver  coins,  in  several  na- 
tions. 

Second.  An  increased  demand  for  gold,  caused  by  a  ma- 
terial falling  off  in  the  yearly  production  of  gold  mines. 

Third.  An  increased  demand  for  gold,  caused  by  a. large 
increase  in  the  amount  of  gold  consumed  in  the  arts.  It 
has  been  generally  proclaimed,  as  a  sound  principle  of  polit- 
ical economy,  that  a  rise  in  the  value  of  a  precious  metal 
diminishes  its  use  in  the  arts.  But,  during  the  past  ten 
years,  this  doctrine  has  been  shown  false  by  the  fact  that, 
right  in  the  face  of  a  steady  rise  in  the  price  of  gold,  the  de- 
mands of  art  for  gold  have  been  greater  both  in  variety  and 


,  IV//V  PRODUCE  HAS  FALLEN  IN  PRICE.  039 

amount  than  ever  before.  Two  facts  have  produced  this 
result:  ist.  The  increased  appHcation  of  scientific  princi- 
ples and  new  inventions  to  arts  and  processes  in  which 
gold  is  employed  ;  2d.  The  steady  increase  in  the  wealth  of 
those  who  desire  to  display  their  riches  by  adorning  their 
persons  and  houses  with  works  of  art  of  which  gold  forms  a 
component  part. 

Fourth.  The  fact  that  during  the  past  twelve  years  large 
amounts  of  gold  have  been  hoarded  by  nations,  banks  and 
individuals.  The  large  amount  hoarded  in  the  United 
States  since  1875  has  been  largely  drawn  from  Europe. 
By  diminishing  the  amount  of  gold  in  Europe,  this  process 
has  raised  its  price  on  that  continent.  Consequently,  the 
gold  we  have  bought  in  England  and  other  European  na- 
tions has  cost  us  a  much  higher  price  than  it  would  if  the 
United  States  had  not  adopted  a  policy  which  inevitably 
increased  the  demand  for  gold. 

AMERICA    BEARING     DOWN      THE     PRICES     OF     AMERICAN 

GOODS. 

The  result  of  this  policy  has  been  low  prices  for  our  cotton, 
wheat,  cheese  and  other  products,  and  high  prices  for  gold. 
The  American  nation  has  thus  been  acting  the  part  of  a 
bear  on  the  prices  of  the  commodities  which  American 
citizens  sent  abroad  for  sale.  Every  dollar  of  debt  held  by 
foreigners  against  us,  which  has  been  canceled  since  1873, 
has  cost  the  people  of  this  country  a  much  larger  amount 
of  goods  than  it  would  if  we  had  not  adopted  the  policy  of 
raising  the  price  of  foreigners'  gold,  and  thus  enhancing  the 
value  of  the  securities  paid  them  in  gold. 

EFFECT   OF   LOWERING   PRICES   IN   ENGLAND. 

Taking  gold  from  England  depressed  wages  and  the 
prices  of  manufactured  goods  in  that  country.  This  en- 
abled English  shippers  to  lower  the  prices  of  the  goods  ex- 
ported to  this  country.  In  order  to  compete  in  price  with 
the  imported  goods,  American  manufacturers  have  been 
obliged  to  lower  the  prices  of  their  wares.     This  has  neces- 


240  SOCIAL  STRUGGLES. 

sitated  a  reduction  of  the  wages  of  factory  operatives. 
Lower  wages  have  diminished  the  abiHty  of  the  operatives 
to  purchase  the  amount  and  variety  of  things  formerly  used 
by  themselves  and  families.  This  has  resulted  in  first  lessen- 
ing the  amount  of  retail,  and  next  in  reducing  the  amount 
of  wholesale  trade.  A  diminished  sale  for  stocks  of  goods 
on  hand  has  lessened  the  ability  of  merchants  to  pay  their 
debts.  This  is  frequently  followed  by  bankruptcy  and  loss 
to  those  who  have  trusted  the  merchants.  Thus  the  circle 
has  spread  from  class  to  class,  and  person  to  person,  until 
what  are  called  "  hard  times  "  generally  prevail. 

THE   DELUSION   THAT   GOLD    PRICES   WOULD   NOT   FALL. 

When  Germany  demonetized  silver,  the  belief  in  the 
"  fixed  value  "  of  gold  was  so  general  that  the  great  major- 
ity supposed  prices  stated  in  gold  alone  would  be  the  same 
as  when  stated  in  both  gold  and  silver.  This  certainly 
Avould  have  been  so,  if  gold  had  possessed  the  "  fixed  value  " 
that  was  ascribed  to  it.  But,  in  fact,  prices  began  to  fall  as 
soon  as  silver  was  disused,  and  this  fall  in  prices  extended 
from  one  thing  to  another,  and  finally  extended  from  nation 
to  nation. 

Meantime  it  has  been  declared  that  "  gold  has  remained 
at  par."  How  has  it  come  to  pass  that  so  many  people 
have  been  deceived  by  this  trick  of  the  "  par  value  of 
gold"? 

In  a  nation  with  gold  as  the  sole  legal  tender,  a  price  is 
fixed  by  law  on  one  commodity,  and  all  other  things  have  no 
price  but  the  market  price.  Thus,  in  this  country,  the  law 
fixes  the  price  of  gold  bullion  at  one  dollar  for  23  22-100 
grains  of  pure  gold,  and  this  price  is  subject  to  no  change 
whatever.  This  proceeding  causes  the  term  "  gold  dollar  " 
to  mean  2."-  fixed  thing'''  But  it  by  no  means  confers  a 
fixed  valu'e  on  the  thing  designated  as  a  dollar.  It  merely 
obscures  the  real  value  of  gold,  and  causes  it  to  appear  sta- 
tionary while  all  other  prices  are  in  motion.  It  causes  people 
to  make  the  same  mistake  that  was  made  when  the  earth 
was  supposed  to  stand  still  and  the  sun  to  move  around  it. 


RESUL  T  OF  LEG  IS  LA  TIOlY.  34 1 


EFFECT   OF    MAKING   A   METAL   LEGAL   TENDER. 

The  attachment  of  a  legal-tender  price  on  a  metal  places 
it  under  conditions  which  render  it  difficult  to  determine 
how  much  of  its  value  is  dependent  on  the  legal-tender  law, 
and  how  much  on  other  facts.  We  know  that  a  portion  of 
its  value  is  derived  from  the  legal-tender  law,  because  that  is 
one  of  several  other  conditions  luhich  create  all  its  value. 
But  what  proportion  of  its  total  value  is  due  to  the  condi- 
tions created  by  the  legal-tender  quality  being  affixed  to  it, 
can  only  be  known  by  actual  test. 

We  know  with  absolute  certainty  that  if  several  of  the 
leading  nations  of  the  world  were  to  demonetize  gold,  that 
the  demand  for  that  metal  would  be  largely  diminished  and 
its  value  proportionally  reduced.  But  exactly  how  great  a 
reduction  of  the  value  of  gold  would  thereby  be  occasioned, 
no  one  can  predict  with  certainty. 

As  heretofore  seen,  the  practical  operation  of  a  legal-ten- 
der law  is  to  mislead  ordinary  observers  into  supposing  that 
the  value  of  the  legal-tender  metal  would  be  the  same  if  no 
law  existed  ;  that  the  law  merely  records  a  fact  produced  by 
other  causes.  But  such  a  law  also  has  a  tendency  to  lead 
persons  to  suppose  that  the  repeal  of  laws  under  which  sil- 
ver is  a  fellow  legal  tender  could  have  but  little  effect  in 
raising  the  price  of  gold. 

Even  so  intelligent  an  observer  as  Prof.  Jevons  seems  to 
have  greatly  underestimated  the  effect  of  legal-tender  laws 
on  the  value  of  gold. 

In  1875  Prof.  Jevons,  in  writing  about  the  demonetization 
of  silver,  said  : 

"  Mr.  Wolowski  has  earnestly  warned  Europe  against  the  danger  of 
abrogating  the  law  of  the  double  standard,  and  demonetizing  silver. 
Germany,  in  adopting  a  gold  standard,  is  causing  a  considerable  demand 
for  gold,  and  at  the  same  time  throwing  many  millions  of  silver  coins 
upon  the  market.  Austria,  Denmark,  Sweden  and  Norway  are  likely  to 
follow  her  example.  If  other  countries  were  to  insist  upon  suddenly 
having  a  gold  money,  it  is  evident  that  gold  would  tend  to  rise  in  value 
compared  with  silver,  which  might  be  largely  depreciated.  If  France, 
Italy,  Belgium  and  other  countries  now  possessing  theoretically  the 
16 


242  SOCIAL  STRUGGLES. 

double  standard,  were  to  allow  the  free  action  of  their  monetary  laws, 
the  depreciated  silver  would  flow  in  and  replace  the  appreciated  gold, 
so  that  the  change  of  values  would  be  moderated.  Mr.  Wolowski  as- 
serts that  if  this  compensatory  action  be  suspended,  and  the  demonetiz- 
ation of  silver  be  extended,  there  must  ensue  a  disastrous  rise  in  the 
value  of  gold,  thus  rendered  the  sole  standard  of  value.  All  debts,  pri- 
vate and. public,  will  be  legally  due  in  this  metal,  and  all  burdens  will  be 
greatly  increased. 

"  Within  the  last  year  or  two  the  predictions  of  M.  Wolowski  may  seem 
to  have  been  verified  in  some  degree.  The  price  of  standard  silver, 
which  was  at  one  time  62^  d.  per  ounce,  has  already  fallen  as  low  as 
57  3-4  d.,  while  the  demonetization  of  silver  in  Germany  is  only  partially  ac- 
complished. The  whole  effect  of  the  great  discoveries  of  gold  was  only  to 
raise  the  price  from  about  59  3-4  d.  to  a  maximum  of  62^  d.,  while  the 
double  standard  system  freely  worked ;  but  since  its  action  has  been  sus- 
pended, as  we  shall  see,  the  minting  operations  of  a  single  government 
can  affect  the  price  in  a  greater  degree. 

"  As  regards  the  gold  required  to  replace  silver,  it  does  not  seem  to  be 
evident  that  there  will  be  any  scarcity.  The  adoption  of  the  gold  stand- 
ard does  not  necessarily  involve  the  coining  of  much  gold,  for  some 
countries  may,  like  Norway,  or  Italy,  or  Scotland,  have  a  principal  currency 
almost  entirely  composed  of  paper.  The  current  supply  of  gold  from 
the  mines  is  still  very  large,  and  we  cannot  be  sure  that  it  will  not  be  in- 
creased by  fresh  discoveries. 

"  In  short,  then,  the  amount  of  supply  and  amount  of  demand  of  both 
the  precious  metals  depend  upon  a  number  of  accidents,  changes,  or  leg- 
islative decisions,  which  cannot,  in  any  way,  be  predicted.  The  price  of 
silver  has  fallen  in  consequence  of  the  German  currency  reforms,  but  it 
is  by  no  means  certain  that  it  will  fall  further  than  it  has  already  done. 
That  any  great  rise  will  really  happen  in  the  purchasing  power  of  gold  is 
wholly  a  matter  of  speculation.  We  cannot  do  more  than  make  random 
guesses  on  the  subject,  and.  as  a  mere  guess,  I  should  say  that  it  is  not 
likely  to  rise.  Gold  has,  since  1851,  been  falling  in  value,  and  an  in- 
creased demand  for  gold  is  not  likely  to  do  more  than  slacken,  or  at  the 
most  arrest  the  progress  of  depreciation." 

Events  have  shown  that  Prof,  Jevons  did  not  appre- 
ciate the  tremendous  effects  of  legislation  on  values.  He 
thought  the  relative  fall  in  the  price  of  silver  to  57  3-4  pence 
per  ounce  was  the  probable  final  measure  of  the  rise  of  gold 
occasioned  by  the  partial  demonetization  of  silver.  But  at 
present  (September,  1885)  silver  is  quoted  at  47  pence  per 


THE  TRADE  DOLLAR.  243 

ounce  in  London.*  If  the  lamented  professor  could  now 
write  on  the  same  subject,  he  would  probably  say  that  the 
predictions  of  M.  Wolovvski  were  rapidly  being  verified. 

We  have  recently  made  an  experiment  in  this  country 
which  practically  shows  the  effect  produced  by  afifixing 
a  legal-tender  quality  to  a  coin,  and  then  removing  that 
quality.  In  1873,  Congress  authorized  the  coinage  of  420 
grains  of  standard  silver  into  a  ''  trade  dollar."  Although 
the  legal-tender  quality  of  this  dollar  up  to  1876  was  re- 
stricted to  only  five  dollars,  and  sums  under  that  amount, 
yet  so  great  was  the  demand  for  them  caused  by  the  de- 
monetization of  the  dollar  of  412^  grains  and  an  unlimited 
legal  tender,  that  over  fifteen  millions  of  those  dollars  were 
coined  in  the  years  1874,  1875,  and  1876.  On  July  22, 
1876,  Congress  repudiated  money  of  its  own  creation  by 
enacting  that  the  trade  dollar  should  no  longer  have  any 
legal-tender  quality  whatever.  On  February  28,  1878, 
Congress  partially  restored  the  silver  dollar  of  412^  grains 
to  its  original  position. 

Thus  two  United  States  silver  dollars  now  are,  and  for 
several  years  have  been,  in  existence.  One,  a  legal  tender 
of  4121^  grains,  circulates  as  one  dollar.  The  other,  a  coin 
bearing  the  United  States  certificate  that  it  weighs  420 
grains,  but  not  a  legal  tender,  is  sold  for  eighty  cents  when  a 
buyer  can  be  found  at  that  price. 

As  an  illustration  of  the  absurd  conclusions  to  which  false 
economic  theories  may  lead  a  person,  it  may  be  stated  that 
our  present  Secretary  of  State  recently  argued  that  it  would 
be  ''dishonest"  for  the  United  States  Government  to  itself 
receive  a  coin  bearing  its  superscription,  at  the  same  price 
it  was  issued  from  the  United  States  mints ! 

HAS    SILVER   DEPRECIATED   IN  VALUE? 

Having  examined  the  truth  of  the  common  belief  that 
gold    has    a    fixed    value,   let    us    now  investigate    the    al- 

*  While  this  work  is  under  revision,  August,  1886,  silver  is  quoted  at 
42^  d.  per  ounce. 


244 


SOCIAL  STRUGGLES. 


leged  recent  depreciation  and  fluctuation    in  the   value    of 
silver. 

The  following  table,  giving  the  price  per  ounce  of  silver 
bullion  for  the  ten  years  preceding  the  .demonetization  of 
the  silver  dollar,  has  been  furnished  by  the  Director  of  the 
United  States  Mint: 


Price  per 

Price  per  ounce 

Value  of  Silver  bullion 

in    United 

in  the  silver  dollar  of 

Year. 

ounce  in 
London. 

States     gold 

412J  grains  in    United 

coin. 

States  gold  coin. 

Pence. 

Cents. 

1863 

61   3-8 

121.09 

104.06   cents. 

1864 

61   3-8 

1 2 1 . 09 

104.06       " 

1865 

61    1-16 

120.47 

103.52       " 

1866 

61    1-8 

120.59 

103.63       " 

1867 

60  9-16 

119.48 

102.67       " 

1868 

60   1-2 

119.36 

102.57       " 

1869 

60  7-16 

119.24 

102.47 

1870 

60  9-16 

1 1 9.  48 

102.67 

1871 

60   1-2 

119.36 

102.57       " 

1872 

60  5-16 

118.99 

102.25       " 

1873 

59  1-4 

116.90 

100.46       " 

It  will  be  seen  from  this  table  that  the  bullion  in  a  silver 
dollar  is  of  the  same  value  as  the  bullion  in  a  gold  dollar 
when  silver  bullion  is  worth  in  London  about  59  pence  per 
ounce.  Thus  it  appears  that  the  demonetization  of  silver 
was  begun  when  the  bullion  value  of  the  silver  dollar  was 
greater  than  the  bullion  value  of  a  gold  dollar.  Since  1873, 
the  relation  of  silver  and  gold  has  steadily  changed.  At 
present  (September,  1885),  an  ounce  of  silver  bullion  can 
be  bought  in  London  for  47  pence  stated  in  the  value  of 
gold  bullion.  This  shows  that  the  value  of  silver  bullion, 
compared  with  the  value  of  gold  bullion,  has  depreciated 
about  twenty  per  cent,  since  1873. 

If  we  assume  that  gold  has  an  invariable  value,  as  is  usu- 
ally done,  we  at  once  arrive  at  the  conclusion  that  silver  is 
about  twenty  per  cent,  less  valuable  now  than  in  1873.  But, 
we  have  heretofore  found  that  gold  has  not  a  fixed  value. 
Moreover,  we  have  found  that  gold,  since  1870,  has  ad- 
vanced about  twenty-five  per  cent,  in  value.     Therefore,   if 


NEED  OF  COMMON  SENSE. 


245 


we  wish  to  learn  the  relative  value  of  silver  to-day,  com- 
pared with  its  value  in  1870,  we  must  subject  it  to  some 
other  test  than  merely  comparing  it  with  gold. 

HOW   TO   TEST   THE   VALUE   OF   SILVER. 

The  value  of  silver  depends  on  precisely  the  same  natural 
laws  which  give  value  to  wheat,  cotton,  wool,  gold,  iron, 
steel,  copper,  lead  and  all  other  things  which  we  term  "  val- 
uable." Therefore  it  follows  that  the  value  of  silver  bul- 
lion can  only  be  correctly  determined  by  testing  its  value 
in  precisely  the  same  way  we  do  the  value  of  other  things. 
We  have  heretofore  found  that  the  only  proper  way  to  as- 
certain the  value  of  a  thing  is  by  comparison  with  some- 
thing besides  itself.  Furthermore,  we  have  found  that  this 
comparison  is  inadequate  and  worthless  if  made  with  only 
one  other  thing,  because  special  events  may  have  either 
raised  or  lowered  the  value  of  that  one  thing.  We  have  also 
found  that  a  correct  comparison  of  value  could  be  made  by 
comparing  the  value  of  the  one  tJiing  under  examination 
with  the  value  of  all  other  things,  or  a  very  considerable 
number  of  other  things. 

Small  portions  of  the  ocean  rise  and  fall  in  form  of  waves 
and  tides.  But  the  general  level  of  the  ocean,  the  great 
mass  of  water,  is  undisturbed  by  the  influences  which  are 
constantly  raising  and  lowering  small  portions  of  it.  In 
like  manner,  sudden  and  great  changes  may  occur  in  the 
value  of  a  small  portion  of  the  valuable  things  in  the 
world.  But  the  great  mass  of  values,  like  the  body  of  the 
ocean,  it  is  impossible  to  rapidly  and  materially  elevate  or 
depress.  When  we  fancy  that  such  a  change  has  been  sud- 
denly made  in  all  the  valuable  things  in  the  world,  it  is 
only  because  we  have  used  a  false  and  delusive  standard 
and  mode  of  measurement. 

Like  all  other  material  things  which  are  bought  and  sold, 
silver  possesses  peculiar  intrinsic  qualities  over  which  legis- 
lation and  other  conditions  have  no  effect  whatsoever. 
But  value  is  neither  an  inherent  intrinsic  quality  of  silver 
nor  of  anything  else.     Value  is  an  appraisal  of  the  import- 


246  SOCIAL  STRUGGLES. 

ance  of  owning  or  using  one  thing,  relative  to  the  import- 
ance of  owning  or  using  the  object  of  comparison,  at  a  cer- 
tain time  and  place  and  under  certain  circumstances.  A 
statement  of  such  an  appraisal,  such  a  comparison,  is  a 
statement  of  value. 

Let  us  apply  these  indisputable  principles  to  the  question 
before  us  and  test  the  value  of  silver  bullion  to-day,  com- 
pared with  its  past  value,  just  as  we  would  test  the  value 
of  iron,  copper,  lead,  or  anything  else. 

How  much  of  other  property,  on  the  average,  can  be 
bought  with  a  thousand  ounces  of  silver  bullion  now,  as 
compared  with  what  could  have  been  bought  when  the 
bullion  in  a  silver  dollar  was  worth  as  much  as  the  bullion 
in  a  gold  dollar?  In  1873  a  thousand  ounces  of  silver 
were  worth,  in  London,  59,250  pence  stated  in  gold  coin. 
A  thousand  ounces  of  silver  are  now  worth,  in  London, 
47,000  pence  stated  in  gold.  Will  47,000  pence  now  buy  as 
much  property  on  the  average  in  London  as  59,250  pence 
would  buy  in  1873  ?  The  market  quotations  of  London 
answer  this  question  in  the  affirmative. 

Li  1873  a  thousand  ounces  of  silver  bullion  were  worth, 
in  New  York,  $1169  in  United  States  gold  coin.  To-day, 
a  thousand  ounces  of  silver  bullion  can  be  bought  in  New 
York  for  about  $9352.  Will  $9352  now  buy  as  much  prop- 
erty of  all  kinds  on  the  average  as  $i  169  would  in  1873?  The 
market  quotatio.ns  of  New  York  answer  :  Yes,  and  more  too. 

The  New  York  Sun  of  September  25,  1885,  contained 
the  following  editorial  regarding  the  last  annual  statement 
of  wholesale  prices  made  by  the  London  Economist. 

"  The  Economist  starts  with  the  prices  of  leading  articles  of  commerce 
in  the  London  market  for  the  six  years  preceding  1850,  the  year  when 
the  new  supplies  of  gold  began  to  produce  their  effect.  Calling  the 
average  price  for  this  period  of  each  article  100,  it  denotes  the  relative 
price  of  that  article  at  the  beginning  of  each  subsequent  year  by  a  num- 
ber which  bears  a  corresponding  relation  to  100.  Thus,  if  coffee  sold  at 
an  average  of  10  pence  per  pound  from  1845  to  1850,  and  at  17.3  pence 
January  i,  1875,  its  number  would  be  100  for  the  first  period  and  173  at 
the  later  date.     The  result  of  this  method  of  computation  is  as  follows  : 


I 


RELATIVE  PRICES. 


247 


ARTICLES. 


Coffee 

Sugar  

Tea 

Tobacco 

Wheat 

Butchers'  meat. 

Cotton 

Raw  silk. . . .  . . 

Flax  and  hemp 

Wool 

Tallow 

Leather 

Copper 


Iron 

Lead 

Tin 

Cotton  cloth. 


1845-50  1875 


100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 

lOJ 

100 
100 


173 

68 

100 

256 

80 

137 
1 1 1 

115 

95 

145 

108 

153 
105 

138 
137 
118 
116 


151 
70 
141 
180 
88 
119 
no 

135 

78 

117 

102 

144 

81 

92 

112 

109 

95 


Totals 1,700  2,155  1,924  1.782  1,846  1,766  1.685  "'571 


1 22 
60 
100 
161 
82 
146 
105 
130 

71 
120 

89 
144 

75 

79 

87 

no 

lOI 


100 

67 

89 

222 

84 

125 

102 

139 

75 

108 

103 

139 
86 
86 
88 

134 
99 


82 
60 

240 

n 
145 

89 
126 

68 
106 
1 1 1 

139 
80 

78 

83 

114 

92 


106 

54 

92 

200 

73 

123 

92 

"7 

76 

98 
113 

139 
71 
69 
70 

104 
88 


93 
37 
78 

228 
60 

122 
93 
89 
78 
92 

87 
144 
60 
75 
65 
90 
80 


"  These  figures  show  that,  with  the  exception  of  tobacco,  butchers' 
meat,  and  leather,  every  article  mentioned  in  the  table  was  lower  at  the 
beginning  of  the  present  year  than  it  was  at  the  beginning  of  1880, 
and  that  all,  without  exception,  are  very  much  lower  than  they  were 
at  the  beginning  of  1875.  As  to  the  astounding  assertion  that  average 
prices  are  no  lower  now  than  before  1850,  it  is  seen  to  be  utterly  un- 
true. Only  tobacco,  butchers'  meat,  and  leather  have  numbers  above 
100,  while  of  the  rest,  coffee  and  cotton  have  93,  and  sugar  is  down 
to  37.  The  totals  of  the  numbers  of  the  seventeen  articles  men- 
tioned is  only  1571,  whereas  in  1845-50  it  was  1700.  That  is  to  say, 
the  average  price  of  these  seventeen  articles  at  the  beginning  of  this  year 
was  lower  than  it  was  in  1845-50  by  the  difference  between  1700  and 
1 57 1.  Or,  to  put  it  in  another  way,  $1571  now  will  buy  as  much  of  the 
seventeen  articles  enumerated  as  $1700  would  in  1845-50.  The  fall 
from  1875  to  1880  was  from  $2155  to  $1924,  and  since  then  each  year 
has  seen  a  further  decline.  During  the  present  year  some  articles — 
sugar,  for  example — have  advanced,  but  wheat,  cotton,  and  other  great 
staples  have  gone  on  falling,  and  are  to-day  lower  than  they  have  been 
for  forty  years. 

"  The  fall  in  the  price  of  silver  has  kept  pace  with  that  of  other  products. 
Prior  to  1875  silver  ruled  steadily  at  about  60  pence  sterling  per  ounce. 
To-day  it  is  quoted  at  about  47  pence.  According  to  the  notation 
adopted  by  the  Economist  this  is  a  fall  from  100  to  79,  which  is  no 
greater  than  the  fall  in  tea,  flax,  copper  and  cotton  cloth,  and  far  less 
than  that  in  sugar,  wheat,  copper,  iron,  and  lead.  Silver,  therefore,  as 
mere    bullion,    is    still    an  equitable   standard  of  value,  notwithstanding 


248 


SOCIAL  STRUGGLES. 


its  depreciation    as   compared   with  gold,   since   its  purchasing   power 
remains  about  as  great  as  it  ever  was. 

"  Measured  by  its  power  to  purchase  the  necessaries  of  life,  the  value  of 
gold  is  shown  by  our  table  to  have  increased  and  to  be  still  increasing. 
Whether  this  proceeds  from  the  growing  scarcity  of  gold,  as  some  say, 
or  from  the  greater  abundance  of  all  other  commodities,  as  insisted  by 
others,  is  immaterial.  The  fact  remains  that,  relatively  to  other  things, 
gold  is  getting  dearer  and  dearer,  since  it  commands  more  and  more  of 
other  things  in  exchange.  The  result  is  that,  under  the  gold  standard, 
every  man  who  owes  money  or  who  sells  goods  has  to  give  more,  while 
the  man  to  whom  money  is  owed  or  who  buys  goods  gets  more,  by  the 
difference  between  looand  79,  than  he  would  under  the  silver  standard.'' 

The  following  article  is  taken  from  the  Chicago  Tribune 
of  August,  1885  : 

"  The  following  table  (see  p.  249)  shows  the  average  prices  of  a  num- 
ber of  leading  articles  in  this  market  for  twelve  years  past,  on  a  currency 
basis,  and  those  of  the  present  time.  These  figures  are  not  the  highest  and 
lowest  reached  during  the  period  named,  but  the  table  gives  a  fairer  view 
of  the  nominal  range  in  values  from  one  year  to  another  than  would  an 
attempt  to  record  the  minor  fluctuations  of  the  several  markets.  The 
prices  are  wholesale  and  generally  for  the  standard  grade,  as  No.  2  in 
grain,  and  cargo  prices  for  common  lumber.  The  table  is  compiled 
from  the  yearly  averages  given  in  77^1?  Tribwie  Anmial  Review  for 
each  of  the  years  named. 

"  The  figures  are  very  suggestive  in  regard  to  the  purchasing  power  of 
the  dollar  during  most  of  the  time  that  has  elapsed  since  the  great  fire  in 
Chicago.  They  show  that  with  the  exception  of  wheat,  corn,  and  live 
stock,  prices  are  now  at  the  lowest  point,  and  in  those  articles  the  pres- 
ent selling  values  have  been  more  in  favor  of  the  buyer  only  in  excep- 
tional seasons.  The  general  average  is  35  per  cent,  less  in  currency,  and 
28  per  cent,  less  in  gold  than  that  of  the  year  succeeding  the  panic  of 
1873,  and  26  per  cent,  less  than  that  of  1881.  If  we  should  take  the  top 
prices  of  that  year  for  comparison,  the  difference  would  be  much  greater." 

The  facts,  tabulated,  show  that  debtors  are  being  forced 
to  pay  debts  in  a  manner  not  contemplated  by  the  original 
contract ;  and  that  an  attempt  is  steadily  made  to  conceal 
this  rascality  by  clamoring  about  the  "  dishonest  silver 
dollar."  But  this  dishonest  dollar  has  remained  more 
valuable  than  the  gold  dollar  was  before  cunning  and  arti- 
fice raised  its  value  as  a  sly  mode  of  oppression  and  wrong. 


RELATIVE  PRICES. 


249 


b  b  b  b  b  b  c/^oj  bb-ibb-ibbw-^Jtyiw-t^bo 

OOJLn-;*   O   0^l^J<-/i   C7\0   On  0\-^  t-n  ^  oj   O   00  0\"^  "^ 


p   ^   p\~;J 

o  "  b  "~J  ui 


O  O   "  o  o 


O    O  l-n    GNl-n    10  l^    CO 
Osvo  O   w  ^4  vo   ~  c^ 


=W: 


—      10  M 

b  b  b  c/;on  b-'bb--b"OJb-<C-)-<i'->idj(>.b 

-fi  l-n    ON^J    O    O    10    OCO    -^    &0OJ    O    CNOLn    0V04-CO    — 


N+-*>f» 


H^ 


l0 


O    O    O    O  l-n 


btoif^-iM-o>-'OJO"'o^^4^b>'-' 

0<jn?5V—    "    00    -lOo    ON"    OtO    «Oj^44^ 


_OOO-^O"^i^Oi-i-'O'-'C>jO'-it00COOJ-P'i-' 


OOOOOJO(-ni0OO-'O"t^Oi-'OJ^J^JMOJO 
Ol-n-f^O^-M    O    Ol-n    Q\^xl  (_n  \0    10    CO^vI    tO    tO    "  ^I  VO  ^J  Ur 


CNVp 7- 

o~-j  bb«Hb>-iiob-'OJ  bxji  to  oj  vb 


>H_     _     _     CO-cp\0O 

b  b  b  b  bcL^i  io  bo  b  b  «  b  b 

tct^  tc^  tcH         cc^         o:^-iH» 


to   o   »-   tooio^  lot^vo 
O   OnO   CnOOO    to^j   ON 


^   71   OnOo 
O    -■  oi    'o\'0\0 


Oio-'-HtoO'-'-P>-0\  0\0j  4^   to 


tcf-,;^-.ct-.o+^ 


""  b  b  b  "^J  b  -^j  • 


t^^Qcfco  tcjw  *4»  tc^ 


tjPtj^tjp'H-'t^j-^f^ 


to    -H   1-.    10   I-   «    to   o    "  ^i   10   0C4i   ON  O 
l-n    Q  OJ  OJ    O  On    00^1  00    O    ON  OO^J  Oj    to 

*+-'cio(-'        ir|»t4-.        ,cLj  Kk-.        1(43:  t^- 


_    \p   to  vo 
b  On    b  Oi 


I  vp    "  ■ 


CCOi    " 
O    O    ^    b  On 


ioOOto-H"Htoi-irt^JvriONtoOj>-c 
Xj\    OD  C0+»    '-iM-^i-cvjoj^ON  00-M  ^J 

l4-*4-i  Kf-K+-.  Kt-  |^)»  (j^ 


250 


SOCIAL  STRUGGLES. 


Table   A. 

Table  showing  the  rise  and  fall  in  Prices  of  the  principal  Com- 
modities IN  the  New  York  Market,  taking  the  period  of  three 
years  1870-1872  as  a  basis,  and  the  average  price  of  Silver  each 
YEAR,     Compiled  by  E.  O.  Leech,  Computer  of  Bullion. 


Articles. 


Average  gold  prices  in  New  York. 


Flour : 

Superfine barrel . 

Rye-flour barrel. 

Corn-meal barrel . 

Wheat:  North'n.  .bushel . 

Rye bushel. 

Oats bushel . 

Corn bushel. 

Coal :  Anthracite ....  ton  . 
Coffee : 

Rio pound. 

Java pound. 

Cotton:  Upland. .  pound. 
Fish: 

Cod cwt . 

Mackerel barrel. 

Hops pound. 

Iron  :  Scotch ton  . 

Lead:    Pig cwt. 

Leather pound. 

Molasses  :  N.  O. .  .gallon. 

Nails:   Cut pound. 

Naval  stores  : 

Turpentine gallon. 

Rosin barrel . 

Paint:  Red-lead cwt. 

Pork : 

Mess barrel . 

Hams pound. 

Lard pound. 

Rice cwt . 

Salt :  Liverpool  .  .  .  .sack. 
Sugar : 

Cuba pound. 

Loaf pound. 

Tallow : 

American pound. 

Wool : 

Common pound. 

Merino pound. 

Pulled pound. 

Average  London  price 
of  silver  per  ounce 
fine 


$5,046 

4-579 

3-725 

1-397 

.867 

•495 

.712 

5.068 

.151 
.185 
.176 

5.407 

15.968 

.247 

34-554 

5-70 

.270 

-603 

.041 

.476 
2.689 
8.158 

16.954 

.  120 

.105 

7.279 

2-133 

.077 
.  109 


.263 

■550 
.426 


i35j$4-439 
616I  3.524 
804J  3.070 

1-307 
1.024 


253, 
934' 

43^1 
547; 


128' 

2X61 
I2I1 


.625 
4.216 

.116 

-173 
.115 


18 


9961  5-449 
200]  18. 990 
197I  .201 
24.44526 


233 

4.858 

212 

-234 

370 

.467 

037 

•037 

308 

.470 

397 

2.067 

900 

6.290 

143 

17.  299 

084 

.116 

06  s 

.  120 

S90 

6.  200 

690 

-750 

070 

086 
063 

254 
414 

349 


1.325 


958 

247 
918 
277 
833 
575 
796 

335 

098 
160 
118 

574    6 

79017 

458 

75324 

960 

237 
587 
041 


,077 

,  TOO 
.070 
.  290 

•454 
364 


515 
2. 115 
6.300 

17.040 

.  140 

.119 

5.900 

•750 

-073 
.099 

.083 

.306 

•455 
.386 


1.145  1.138  1.136  1.110 


16, 


410 

723 
922 
206 
730 
503 
644 
350 

104 
177 
103 

3" 

520 
562 
000 

340 
232 

529 
039 

428 
623 


690 

139 
100 
400 
710 

068 
091 

078 

302 
440 
381 


I2.859 

2.694 

3-038 

1. 016 

.691 

.368 

.616 

4.106 

.  109 
.165 
.109 

5.267 

21-534 

.245 

21.618 

3.822 

-237 
.512 
•038 

.324 
I  ••35 1 
5.700 

16. 363 
•131 

•043 

6. 1 00 

.  700 

•053 
.074 

.071 

•  265 
.409 
•339 


$3,205 

3.040 
.970 
.709 
.361 
.528 

3^825 

-093 
.125 
.082 

4.274 
20.419 

.134 
20.630 

3-925 
.221 

•507 
.022 

•343 
1-137 
5-490 

11.645 

.108 

.068 

5-384 

-732 

•053 
.069 

.056 

•343 
.266 
.298 


1.113  1.064 


RELATIVE  PRICES. 


251 


Table  B. 


Articles. 


Flour : 

Superfine barrel. 

Rye-flour barrel . 

Corn-meal barrel . 

Wheat : 

Northern bushel. 

Rye bushel. 

Oats bushel . 

Corn bushel. 

Coal :  Anthracite ton . 

Coffee  : 

Rio pound. 

Java pound. 

Cotton:  Upland,  .pound. 
Fish: 

Cod cwt. 

Mackerel barrel. 

Hops pound. 

Iron:  Scotch ton. 

Lead  :  Pig cwt . 

Leather pound . 

Molasses  : 

New  Orleans. .  ..gallon. 

Nails:   Cut pound. 

Naval  stores : 

Turpentine gallon. 

Rosin barrel. 

Paint : 

Red-lead cwt . 

Pork: 

Mess barrel 

Hams pound. 

Lard pound. 

Rice cwt. 

Salt:  Liverpool. ..  .sack. 
Sugar : 

Cuba pound. 

Loaf   pound. 

Tallow  : 

American pound . 

Wool  : 

Common pound . 

Merino pound . 

Pulled pound. 

Average 


Comparison  of  prices  of  1880  and  subsequent  years,  with 
the  average  prices  of  1870-1872,  expressed  in  1,000 


*■'  Q.00 


1,000 
1,000 
1,000 

1,000 
1,000 
1,000 
1,000 
1,000 

1,000 
1,000 
1,000 

1,000 
1,000 
1,000 
1,000 
1,000 
1,000 

I,  000 
1,000 

1,000 
1,000 

I,  000 

1,000 
1,000 
I,  000 
I,  000 
1,000 

1,000 
1,000 

1,000 

1,000 

I,  000 

I,  000 

1,000 


819 
•  790 

753 

S97 

1,077 
885 
768 
807 

847 

1,168 

687 

1, 109 

1,077 
798 
709 
74 
785 

614 
90 

647 

520 

968 

598 
700 
619 

905 


909 

7S9 

768 

966 

753 
819 

80-, 


.  880 
769 
824 

936 
1,181 

978 
878 
832 

768 
935 
653 

1,008 
1,189 
814 
707 
852 
867 

7S9 
902 

987 
769 

771 

1,020 
967 

1,143 
852 

354 

I,  000 
917 

854 

1,103 
825 

854 

884 


784 

709 

1,052 

914 

961 

1, 162 

1,118 

855 

649 
865 
670 

I,  216 

1,177 

1,874 

774 

870 

878 

973 
1, 00c 


787 

772 

1,005 
I,  167 

1,133 
811 

354 
948 


r,  012 

1,163 
827 
906 

951 


676 

813 

784 

863 

842 

1,016 

904 

858 


957 

585 

I,  167 
1,097 

2,275 
695 
761 
859 

877 
951 


604 
711 


1,158 
952 

879 


835 

951 

1,148 
800 

894 

goo 


567 
588 
816 

T^l 
797 

743 
865 
810 

722 

892 
619 

974 
1,349 
992 
626 
670 
87S 

849 
927 

681 

502 

699 

965 
1,092 

790 
838 
328 

688 
679 

866 

1,008 

744 
796 

791 


63s 
803 
816 

694 
818 
729 
742 
755 

616 
676 


790 
,279 
543 
597 
688 
819 

841 
537 

721 

423 

687 
900 
648 
740 
343 


633 
683 

1,304 
484 
700 

711 


2C2  SOCIAL  STRUGGLES. 

From  Table  A  it  appears  that  in  1870- 1872  the  average 
price  of  superfine  wheat  flour,  stated  in  gold,  was  $5,046. 
It  would  follow  that  100  barrels  of  such  flour  were  then 
worth  $504.60  in  gold.  At  the  same  time,  the  average 
price  of  silver  was  $1,325  per  ounce  in  gold.  Therefore, 
380  and  83-100  ounces  of  silver  in  1870- 1872  would  buy  100 
barrels  of  superfine  wheat  flour. 

Table  A  also  shows  that  in  1885.  the  average  price  of 
superfine  wheat  flour  was  $3,205  stated  in  gold.  In  that 
year  loo  barrels  of  such  flour  therefore  cost  $320.50  in  gold. 
At  the  same  time,  the  average  price  per  ounce  of  silver  was 
$1,064  in  gold.  Therefore  ,301  22-100  ounces  of  silver,  in 
1885,  would  buy  the  same  amount  and  quality  of  flour  that 
380  83-100  ounces  of  silver  would  in  1870-1872, 

In  other  words,  in  1885,  100  barrels  of  superfine  wheat 
flour  would  buy  79  and  61-100  less  ounces  of  silver  than  the 
same  amount  and  quality  of  flour  would  buy  in  1 870-1 872. 
A  few  figures  will  show  the  reader  that  with  the  excep- 
tion of  fish  and  common  wool,  articles  subject  to  exceptional 
influences,  a  similar  diminution  as  above  found  in  case  of 
wheat  flour  exists  in  the  amount  of  silver  which  can  be 
bought  with  a  given  amount  of  commodities  in  1885  as 
compared  with  1870- 1872.  It  clearly  appears  that  instead 
of  being  ''  depreciated,"  as  alleged  by  its  enemies,  silver  has 
actually  risen  in  value  since  1872.  And,  be  it  remembered, 
in  1872  the  bullion  value  of  a  silver  dollar  was  2}{  per  cent, 
greiter  than  the  bullion  value  of  a  gold  dollar. 

From  Table  B  it  appears  that  if  the  figures  1000  be  as- 
sumed to  represent  the  total  average  of  prices  stated  in 
Table  A,  the  figures  711  represent  the  total  average  prices  of 
the  same  commodities  in  1885.  From  Table  A  it  appears 
that  the  ratio  of  decline  in  the  price  of  silver  bullion  stated 
in  gold,  from  1870-1872  to  1885,  is  from  $1325  to  $1064. 
This  is  equal  to  about  19.7  per  cent.;  this  percentage  repre- 
senting the  decline  in  the  value  of  silver  relative  to  gold  for 
the  time  stated. 

From  1870-1872,  commodities  declined  in  value  by 
gold   figures   28.9  per  cent.     That  is,  28.9  per   cent,  would 


WHA  r  THE   WAR  ON  SIL  VER  MEANS. 


25; 


need  to   be   subtracted   from   the   average    prices  of    1870- 
1872  to  produce  the  average  prices  of  1885. 

The  foregoing  figures  show  that  the  bulHon-purchasing 
power  contained  in  a  silver  dollar  in  1885  was  about  nine  per 
cent,  greater  than  the  bullion-purchasing  power  contained  in 
a  gold  dollar  in  1870- 1872.  If  we  now  had  unlimited  coin- 
age of  silver  dollars,  each  dollar  would  be  worth,  at  least, 
the  value  of  the  bullion  from  which  it  was  made.  It  follows 
that  the  "  flood  of  debased  money  "  of  which  we  hear  so 
much  would  be  nothing  more  nor  less  than  the  coinage  of 
dollars,  each  one  of  which  would  contain  bullion  of  a  greater 
value  than  a  gold  dollar  had  in  1870. 

The  real  nature  of  the  "  cheap  money  "  cry  can  perhaps  be 
shown  by  a  dialogue  between  a  farmer  and  a  money-lender 
who  has  stated  his  aversion  to  cheap  money. 
■"  Are  you  opposed  to  everything  being  cheap  ?  " 

"  No.  It  is  a  great  blessing  to  have  cheap  bread,  meat, 
clothing,  and  in  short  to  have  everything  cheap.  I  do  not 
care  how  cheap  all  commodities  become.  But  my  property 
would  be  depreciated  if  I  am  paid  off  in  '  cheap  silver.' 

"  In  that  case  the  number  of  your  dollars  would  not  be 
diminished ;  and  would  not  the  fact  that  with  these  '  cheap  ' 
dollars  you  could  buy  more  property  than  with  the  dollars 
you  loaned  be  conclusive  evidence  that  their  valnc  was 
unimpaired  ?  The  fact  is,  you  want  to  have  the  value  of 
land,  labor  and  everything  else  put  down,  except  the  value 
of  money.  You  want  to  curtail  the  production  of  dollars 
while  the  production  of  all  things  else  goes  on  without 
limit.  Do  you  not  see  that  this  is  simply  a  mode  of  rob- 
bing the  rest  of  the  community  for  your  benefit  and  others 
like  you  ?  " 

ANOTHER   COMPARISON   OF   PRICES. 

The  following  table,  prepared  by  H.  C.  Burchard,  late  di- 
rector of  the  United  States  Mint,  has  been  copied  from  an 
interesting  and  valuable  pamphlet,  "  The  American  Dollar," 
by  Judge  R.  M.  Hughes  : 


254 


SOCIAL  STRUGGLES. 


Average  and  Comparative  Prices  of  the  Principal  Domestic 
Commodities  Exported  from  the  United  States  from 
Declared  Values  at  Time  of  Export,  in  Gold  : 


commodities. 


Hogs head 

Mules " 

Sheep " 

Ashes,  pot  and  pearl,    pound 
Beer : 

I-n  bottles dozen 

In  casks gallon 

Barley bushel 

Bread  and  biscuit pound 

Indian  corn bushel 

Indian  corn  meal barrel 

Oats bushel 

Rye " 

Rye  flour barrel 

Wheat bushel 

Wheat  flour barrel 

Brick M 

Candles pound 

Coal : 

Anthracite ton 

Bituminous " 

Copper,  pig  and  bar. .  .pound 
Cordage,  rope,  twine.. .      " 
Cotton : 

Sea  Island " 

Other " 

Colored yard 

Uncolored " 

Apples,  dried pound 

Glue " 

Hay ton 

Hops pound 

Ice ton 

India-rubber  boots,  etc  .  .pair 
Iron : 

Pig pound 

Bar  . .- " 

Boiler  plate " 

Railroad  bars  ....      " 
Sheet,  band,  etc.. .      " 

Car  wheels piece 

Nails  and  spikes pound 

Steel  ingots " 

Boots  and  shoes pair 


Average  price  during  fiscal  years. 


$15-736 

141.055 

2.405 

.072 

2.091 

•357 
■549 
.057 
.924 

5.001 
.629 

1 .  131 

5-514 

1 .289 

6. 112 

II .  112 

.  164 

4.710 
6.632 

.174 
.205 

•537 
-235 
.  170 
.162 
.094 
.251 

17-423 
•153 

4.068 

3-245 

.016 
.050 
.046 
.036 
.054 
19.914 
.057 
.119 
1.519 


$16,896 

114-835 

3-424 

.058 

1.854 

-375 

,690 

.049 

-683 

2.670 

.506 

.764 

4.156 

1 .  126 

5-955 

8.854 

.124 

4-747 

3  440 

•157 

.  109 


.  107 

.077 

.083 

.077 

.181 

19.656 

.718 

2.599 

1.382 

.015 

•  034 
.036 
.032 
.049 
10.662 

-035 

.092 

1 .219 


$13,528 
131 . 162 

3-105 
.056 

1.896 

•309 

.556 

.048 

.611 

3-238 

-398 

.695 

4.136 

1 .066 

5.588 

7.590 

.  126 

3.061 

4.705 
.148 
.096 

•323 
.105 
.072 

-075 

.071 

.  164 

18.322 

.242 

2.305 

1 .208 

.013 
.030 


Percentage  of 
price  of  1884 
to    price    of 

1870. 


.029 

.047 

9-427 

•033 1 

.  io6| 
1 .  20 1 


85.9 

92.9 
129. 1 

90.6 
86.5 

lOI  .2 
84.2 

66.1 

64.7 
63-3 
61 .4 
75.0 
82.7 
91.4 
68.3 
76.8 

64.9 
70.9 
85.0 
47.0 

60. 1 

44-7 
42-3 
46.3 
75-5 
65-3 
105.2 
158.2 
56.6 
37-2 

81.2 
60.0 


80.5 
87.0 
47-3 
57-9 
89.0 
79.0 


RELATIVE  PRICES. 


255 


COMMODITIES. 


Lime  and  cement barrel 

Oil  cake pound 

Mineral  oil,  crude gallon 

Naphthas,  benzine,  etc.      " 

Illuminating  oil ^    " 

Lard  oil " 

Neatsfoot  oil " 

Sperm  oil " 

Whale  oil " 

Linseed  oil " 

Gunpowder pound 

Bacon " 

Hams " 

Fresh  beef " 

Salted  beef " 

Butter 

Cheese " 

Eggs  ....    dozen 

Fish : 

Dried cwt 

Pickled barrel 

Lard pound 

Pork . .  .pound 

Onions bushel 

Potatoes 

Quicksilver pound 

Rags " 

Rice " 

Salt bushel 

Cotton  seed pound 

Soap " 

Spermaceti " 

Spirits  of  Turpentine  .  .gallon 

Starch pound 

Sugar : 

Brown " 

Refined " 

Molasses gallon 

Tallow pound 

Tobacco,  leaf " 

Varnish gallon 

Beeswax pound 

Boards,  planks M  feet 

Timber,  sawed cubic  feet 

Wool,  raw pound 

Zinc,  plates  and  bars. .      " 

Average 


Average  price  during  fiscal  years 


1870. 


$1,972 
.021 
.206 
.  104 
•305 
1.375 
1.295 

1.589 

.734 

1.058 

.157 
.157 
•  157 
.072 

.044 
•293 
•153 

■395 

5.187 

8.185 

.165 

•133 
1.675 
.690 
.406 
.089 
.059 
.401 

.080 

•329 
.418 
.082 

.112 
.125 
.300 

.  lOI 

•"3 

1.587 

•396 

20. 732 

.171 

.096 


$1 .608 
.013 
.074 
.076 
.087 

.931 
.892 

1.055 

.508 
.638 

•153 
.  109 
.  127 
.  102 
.089 
.185 
.  112 
.208 

5.571 
7.185 
.118 
.099 
.945 
•975 
.369 
.018 
.063 

•319 
.009 
.051 
.167 
.442 
.046 

.086 
.091 
.  223 
.082 
.082 
1. 941 
.296 
16.788 

•153 
•  342 
.083 


$1,649 
.014 
.079 
.071 
.092 
.707 
.941 
.948 
•390 
.660 

•157 
.  102 
.  102 
.099 
.076 
.182 
.103 
.212 

5.824 

6.593 
.095 

.079 
.859 
.675 

.344 
.019 
.060 

•392 
.012 
.049 
.187 

•344 
.045 

•  073 
.071 
.152 
.076 
.091 
1.963 
.310 
17.063 
.112 
.296 
.076 


Percentage  of 
price  of  1884. 
to  price   of 

1870. 


83.6 

66.6 

38.3 
68.2 
30.1 

5i^4 
72.4 
59.6 

53.1 

62.4 

100.  o 

•64.9 

64.9 

137.5 

172.7 

62. 1 

67.3 

53.7 

112. 2 

80.5 
57.5 
59-4 
51-3 
97.8 
55.7 
21.3 
101.7 

97.7 


61 .2 
56.8 
82.3 
54.8 

65.2 
57.6 
50.7 
75.2 
80.5 
123.7 
78.3 
82.3 
65.5 


79.2 


73-9 


256 


SOCIAL  STRUGGLES. 


OUGHT   AN   EQUALITY   TO    BE    MAINTAINED   BETWEEN   THE 
VALUE   OF   THE   GOLD   AND   THE   SILVER  DOLLAR  ? 

Some  persons  favor  coinage  of  silver  to  the  greatest  ex- 
tent consistent  with  maintaining  an  equaHty  between  the 
silver  and  the  gold  dollar.  Beyond  that  point  they  are  not 
willing  to  go. 

A  little  reflection  shows  that  such  persons  are  ready  to 
sacrifice  the  positive  advantages  of  a  currency  of  uniform 
value  to  the  superstition  that  gold  has  an  "  unvarying  value." 
The  foregoing  tables  show  conclusively  that  gold  has  risen 
largely  in  value.  Suppose,  in  consequence  of  an  increased 
use  of  gold  in  the  arts,  a  diminution  of  the  productiveness 
of  gold  mines,  or  from  any  other  cause,  gold  should  continue 
to  rise.  Instead  of  a  rise  of  twenty-six  per  cent.,  suppose  it 
should  rise  fifty  or  sixty  per  cent,  and  prices  stated  therein  be 
correspondingly  depressed.  In  such  case,  which  is  probable, 
shall  we  contract  and  limit  the  number  of  silver  dollars  in 
order  to  raise  each  one  of  them  to  whatever  value  gold  may 
reach?  But  this  absurd  conclusion  is  precisely  what  the 
doctrine  aforesaid  inevitably  brings  us  to,  if  we  logically  ad- 
here to  it. 

The  theory  that  we  should  make  it  a  cardinal  point  to 
maintain  an  equality  between  the  value  of  the  gold  dollar 
and  the  silver  dollar  is  utterly  false.  It  ignores  the  estab- 
lished principle  that  the  only  way  to  preserve  uniformity  in 
the  value  of  dollars  is  to  maintain  uniformity  in  their  rela- 
tive number,  without  reference  to  the  materials  of  which 
those  dollars  are  composed. 

STATEMENTS   OF   THE   NEW   YORK   TRIBUNE. 
The  New  York  Tribune  of  January  8,  1885,  says : 

"About  the  13th  of  December,  1884,  the  market  for  products  touched 
the  lowest  level  of  prices  ever  reached  in  this  country  since  records  of 
prices  began.  The  range  of  prices  is  now  below  that  of  October,  1878, 
then  the  lowest  reached  for  many  years.  When  the  depreciation  of 
paper  currency  vanished  in  October,  1878,  it  was  found  that  prices  were 
more  than  15  per  cent,  below  the  specie  level  of  i860,  the  last  preceding 
year  in  which  prices  had  been  made  in  gold." 


VA  L  UE  OF  SIL  VER. 


257 


In  the  summer  of  1885,  the  New  York  Tribune  contained 
another  editorial,  the  essence  of  which  was  stated  in  the 
heading,  "'Prices  tzventy per  cent,  loiver  than  in  i860  ."  As 
the  Tribune  is  an  advocate  of  demonetizing  silver,  the 
significance  of  the  above  admission  is  apparent.  A  little 
reflection  ought  to  have  shown  this  editor  that  in  these 
articles  he  refuted  all  that  he  had  been  constantly  saying 
about  the  "depreciation  of  silver.".  For,  by  his  own  show- 
ing, the  change  in  values  arose,  almost  entirely  from  stating 
prices  in  gold,  enhanced  in  value,  while  prices  stated  in 
silver  were  little  changed. 

SILVER   MORE   STABLE   IN   VALUE   THAN   GOLD. 

First.  Its  amount  is  greater.  The  total  value  of  all  the 
silver  in  the  world  is  greater  than  the  total  value  of  all 
the  gold  in  the  world.  The  smaller  the  amount  of  any 
commodity,  the  more  easily  and  readily  it  is  affected  by 
any  influence  which  tends  either  to  increase  or  diminish  the 
demand  for  it. 

In  1828,  the  Russian  Government,  owning  the  principal 
platinum  mines  in  the  Ural  Mountains,  in  view  of  the  inde- 
structible qualities  of  platinum,  commenced  to  coin  it  into 
money.  But  it  was  soon  found  that,  owing  to  the  small 
stock  of  platinum  in  existence,  any  increased  demand  for 
those  coins  caused  a  great  increase  in  their  value.  Coin- 
age of  platinum  was  soon  abandoned  in  consequence.  This 
experiment  of  Russia  demonstrated  what  could  have  been 
foretold  from  reasoning  ;  viz.,  the  value  of  the  materials 
from  which  metallic  money  is  made  is  raised  or  lowered  by 
an  increased  or  a  diminished  demand  for  them,  just  as  an 
increase  or  a  diminution  of  the  temperature  to  which  they 
are  exposed  raises  or  lowers  the  heat  of  different  sized 
bodies  of  water.  A  few  hours  of  warm  sunshine  will  ma- 
terially raise  the  temperature  of  a  small  dish  of  water. 
Much  less  effect,  by  the  same  rays,  will  be  produced  on  a 
barrel  of  water.  On  a  deep  lake,  the  effect  would  be  inap- 
preciable. The  same  phenomena  are  produced  by  the  ex- 
17 


258 


SOCIAL  STRUGGLES. 


posure  of  different  sized  bodies  to  cold.  The  shallow  water 
will  freeze  while  the  deep  water  remains  open. 

The  amount  of  gold  being  smallest,  it  js  first,  and  to  the 
greatest  extent,  affected  in  value  by  an  increased  demand 
for  it.  In  the  language  of  brokers,  it  is  easily  "  cornered." 
Silver,  being- larger  in  amount  and  value  than  gold,  is  less 
readily  affected  by  changes  of  conditions  than  gold.  And 
when  gold  and  silver  are  both  used  as  full  legal  tenders 
with  unlimited  coinage,  it  is  more  difficult  to  either  raise 
or  lower  their  value  than  when  one  metal  is  used  singly. 
The  stock  of  metal  on  hand  is  then  greater  and  there  is 
more  inertia  to  overcome. 

Second.  Silver  is  owned  and  held  by  a  m.uch  greater 
number  of  persons  than  gold.  This  fact  produces  an  effect 
similar  to  the  superior  stability  in  temperature  of  a  large 
body  of  water.  It  is  far  more  difficult  for  any  new  condiv 
tion  or  event  to  suddenly  affect  the  value  of  what  is  held 
by  six  hundred  millions  of  people  than  to  affect  something 
held  by  two  hundred  millions. 

Third.  Money,  whose  value  is  practically  identical  with 
the  value  of  the  materials  from  which  it  is  made,  is  perfect 
just  in  proportion  to  the  stability  of  the  value  of  those 
materials.  Said  materials  will  remain  stable  in  value  just 
to  the  degree  that  the  conditions  surrounding  them  are 
stable  ;  that  is,  they  must  increase  in  amount  when  an  in- 
creased demand  arises  for  them  and  they  must  diminish  in 
amount  when  a  diminished  demand  occurs.  Otherwise 
the  altered  demand  will  inevitably  alter  their  value.  This 
is  one  reason  why  money  made  of  silver  is  less  liable  to 
fluctuate  in  value  than  money  made  of  gold.  Gold  mining 
partakes  more  of  chance  and  accident  than  silver  mining. 
Silver  ore  can  be  more  certainly  and  readily  increased  in 
amount  by  the  application  of  additional  machinery  and 
labor  than  gold  bullion  can.  In  other  words,  silver  mines 
are  more  in  the  nature  of  a  permanent,  regular  industry,  and 
consequently  are  more  responsive  to  the  stimulus  of  an  in- 
creased demand  for  silver  bullion  than  gold  mines.     Espe- 


I 


STABLE  PRICES  AND  STABLE  MONEY. 


259 


cially  is  this  comparison  true  when  made  with  reference  to 
gold  placer  mines. 

But  it  is  obvious  that  neither  one  of  said  metals  can  be 
as  fully  controlled  in  amount  as  may  be  necessary  in  order 
to  insure  absolute  stability  in  the  value  of  the  money  made 
therefrom. 

Fourth.  Its  greater  bulk  and  weight  make  it  more  dif- 
ficult to  hoard  silver  than  to  hoard  gold.  It  is  not  the 
amount  of  money  in  a  country  which  affects  prices  so  much 
as  the  amount  of  money  in  actual  circulation.  Hence  a 
combination  of  capitalists,  by  hoarding  a  large  amount  of 
money,  can  depress  prices  at  pleasure.  It  is  more  unlikely 
that  a  country  with  a  silver  currency  should  be  suddenly 
drained  of  a  large  portion  of  its  coin,  as  the  combined  re- 
sult of  exportation  and  the  hoarding  which  often  accom- 
panies large  foreign  shipments  of  bullion,  than  in  case  of  a 
country  with  a  gold  currency. 

STABILITY   OF   PRICES    IS   THE    PRACTICAL   RESULT   OF  A 
STABLE    CURRENCY. 

Stability  in  the  average  scale  of  prices  is  the  practical  re- 
sult of  a  currency  whose  value  is  stable.  In  fact,  the  market 
quotations  of  prices,  on  the  average,  are  simply  a  record  of 
the  fluctuations  in  the  value  of  the  money  in  which  those 
prices  are  computed  and  paid.  This  test  shows  that  for 
the  past  quarter  of  a  century,  the  period  which  includes  the 
years  when  several  nations  have  made  war  upon  silver, 
the  value  of  silver  has  been  more  stable  than  the  value  of 
gold.  Any  one  can  readily  test  the  accuracy  of  the  above 
statement  by  comparing  the  prices  of  commodities  each 
year,  stated  in  gold,  with  what  those  prices  would  be  if 
computed  in  silver.  He  will  find  that  the  apparent  fall  in 
the  value  of  silver  has  kept  about  an  even  pace  with  the 
apparent  fall  of  prices  ;  thus  demonstrating  that  the  value 
of  silver  has  remained  nearly  stationary  while  the  value  of 
gold  has  been  forced  up  by  increased  demand  over  twenty- 
five  per  cent. 

A  great  cry  has  been  raised  about  the    ''  depreciation  " 


26o  SOCIAL  STRUGGLES. 

of  silver.  The  "  8o-cent  dollar  "  cry  is  so  apparently  true 
that  it  deludes  a  multitude  of  persons.  But  every  cloud- 
less day  presents  a  similarly  apparent  fact ;  to  wit,  the 
motion  of  the  sun.  It  certainly  does  look  as  if  it  rose  in 
the  morning  and  traversed  the  sky  throughout  the  day. 
What  wonder  that  all  mankind  until  within  less  than  300 
years  supposed  the  earth  stood  still !  The  "  fixed  value  of 
gold"  is  an  idea  superficially  and  apparently  true; — but 
in  fact  it  rests  on  a  delusion  similar  to  the  old  belief  that 
the  earth  had  a  fixed  position. 

The  only  scientific  test  of  the  actual  value  of  silver  is 
found  in  a  comparison  of  prices.  Prices  are  an  unfailing  in- 
dication of  the  value  of  money,  because  average  prices  are 
the  average  judgment  of  mankind  in  regard  to  the  relative 
value  of  different  things,  stated  in  money  terms. 

In  1864  the  silver  dollar  of  4.12%  grains  was  worth  four 
per  cent,  more  than  the  gold  dollar.  But  1000  ounces  of 
silver  bullion  will  now  buy  more  property  than  1000  ounces 
of  silver  bullion  would  in  1864.  Silver  has  therefore  actually 
a  greater  value  now  than  in  1864. 

THE    125-CENT  DOLLAR. 

The  facts  would  be  correctly  stated  if  it  were  said  that  the 
gold  dollar  has  become  the  125-cent  dollar,  and  that  who- 
ever lent  gold  in  1873  and  is  now  paid  in  silver  dollars  re- 
ceives more  value  than  he  loaned.  Instead  of  "  cheap  silver  " 
he  would  be  paid  in  silver  dearer  than  gold  in  1873. 

LABOR,  A   TEST   OF  VALUE. 

Adam  Smith  for  a  long  time  has  been  considered  one  of 
the  ablest  writers  on  political  economy.  Adam  Smith  says  : 
"  Labor  is  the  only  universal,  as  well  as  the  only  accurate 
measure  of  .value,  or  the  only  standard  by  which  we  can  com- 
pare the  values  of  different  commodities  at  all  times  and 
places." 

As  a  result  of  progress  in  science  and  its  application  to 
art,  more  labor  is  yearly  performed  by  machinery ;  less  mus- 
cular exertion  is  required  from  human  hands  to  accomplish 


TEST  OF  VALUE  BY  LABOR.  26 1 

a  given  result.  Consequently,  whoever  loaned  10,000  days' 
labor  a  hundred  years  ago,  and  is  repaid  now  with  the  same 
number  of  days'  labor,  gets  more  value  than  he  loaned.  In 
addition  to  the  labor  loaned,  he  receives  back  the  interest 
and  the  amount  of  products  which  10,000  days'  labor  now 
represent  in  excess  of  what  they  were  the  equivalent  of 
when  the  loan  was  made.  But  suppose  we  apply  the  method 
recommended  by  Adam  Smith  to  comparing  the  value  of 
silver  in  1885  with  its  value  twenty  years  previously.  In 
1865  nothing  had  been  heard  about  the  "depreciation  and 
fluctuation  of  silver."  The  bullion  value  of  the  silver  dol- 
lar of  412^  grains  was  then  3  52-100  per  cent,  higher  than 
the  bullion  value  of  the  gold  dollar  of  25  8-10  grains.  A 
hundred  ounces  of  standard  silver  bullion  were  then  worth 
about  $1204  in  New  York.  A  hundred  ounces  of  silver 
are  now  (1885)  worth  about  $960  in  New  York. 

Will  $960  buy  as  much  labor  in  New  York  in  1885  as 
$1204  would  in  1865?  Any  one  with  the  slightest  famil- 
iarity with  the  wages  of  labor  would  answer  this  question  in 
the  affirmative.  In  fact,  on  the  average  throughout  the 
United  States,  a  smaller  amount  of  labor  was  required  to 
buy  a  hundred  ounces  of  silver  at  any  time  for  the  ten  years 
prior  to  1872  than  is  required  now. 

SILVER   HAS   RISEN   IN  VALUE. 

Thus  we  find  that  instead  of  having  fallen  in  value,  as 
commonly  alleged,  a  given  mtinbcr  of  ounces  of  silver  bullion 
has  a  greater  value  noiv,  thus  determined,  than  tvhen  the  bull- 
ion value  of  the  silver  dollar  zvas  more  than  that  of  the  gold 
dollar.  The  abused  silver  dollar  in  1885  has  actually  a 
greater  bullion  value  than  the  gold  dollar  had  in  any  one  of 
the  ten  years  before  the  demonetization  of  silver,  when  meas- 
ured in  the  manner  recommended  by  Adam  Smith. 

WHY   SILVER   HAS  NOT  FALLEN  IN  VALUE. 

The  question  naturally  arises:  Why  has  not  silver  bullion 
fallen  in  value  in  consequence  of  being  demonetized  by  sev- 
eral nations  ?     It  has  thereby  been  placed  under  more  unfav- 


262  SOCIAL  STRUGGLES. 

orable  conditions  than  formerly.  .Why  has  it  not  fallen  in 
value,  not  merely  relatively  to  gold,  but  absolutely,  when 
tested  in  a  proper  manner? 

If  the  demonetization  of  silver  had  been  the  only  event 
occurring  to  change  the  various  conditions  which  give  value 
to  silver,  it  would  undoubtedly  have  largely  depreciated. 
But  several  other  causes  have  modified  the  result  that 
otherwise  would  have  followed  silver  demonetization. 

First.  A  steady  increase  both  in  the  population  and  in  the 
commercial  and  industrial  activity  of  several  nations,  thus 
creating  more  demand  for  both  gold  and  silver. 

Second.  An  increase  in  the  consumption  of- silver  in  the 
arts.  This  arises  both  from  a  greater  use  of  silver  for  pur- 
poses to  which  it  was  formerly  applied,  and  from  new  in- 
ventions and  new  applications  of  its  use. 

Third.  The  falling  off  in  productiveness  of  some  silver 
mines  and  the  dissipation  of  former  expectations  that  enor- 
mous amounts  of  silver  would  be  easily  mined. 

Fourth.  The  resumption  of  "  specie  payments  "  by  several 
nations.  A  new  paper  dollar  which  performs  all  the  functions 
of  a  metallic  dollar  has  the  same  influence  on  the  value  of  all 
metallic  dollars  in  existence  as  the  addition  to  the  currency 
of  a  metallic  dollar  has.  That  is,  every  additional  paper 
dollar  depresses  the  value  of  every  existing  metallic  dollar. 
On  the  other  hand,  the  destruction  of  paper  money  enhances 
the  value  of  existing  metallic  money  just  to  the  extent  that 
the  destruction  of  an  equal  amount  of  metallic  money  would. 
There  is  more  demand  for  what  is  left  in  circulation,  and  its 
value  is  proportionally  increased. 

We  have  replaced  fractional  paper  money  with  silver  coins, 
and  have  partially  remonetized  the  silver  dollar.  In  this  way 
we  have  created  a  marlcet  for  over  two  hundred  million  dol- 
lars' worth  of  silver.  If  the  United  States  should  stop  the 
coinage  of  silver,  the  tendency  of  such  a  measure  would  in- 
evitably be  to  still  further  enhance  the  value  of  gold,  and  to 
correspondingly  depress  the  value  of  silver,  relative  to  the 
value  of  gold. 

As  heretofore  stated,  the  value  of  a  thing  always  depends 


WHA  T  HAS  AL  WA  YS  OCCURRED.  263 

on  the  conditions  under  which  it  is  placed.  But  it  must 
be  remembered  that  value  does  not  depend  on  one  condi- 
tion, but  upon  the  aggregate  influence  of  the  whole  num- 
ber of  conditions.  In  the  case  of  silver  since  1872,  one  con- 
dition, viz.,  its  disuse  in  several  nations  as  a  legal  tender, 
tended  to  lower  its  value.  But  the  various  other  condi- 
tions, above  named,  have  so  far  neutralized  the  effect  of  de- 
monetization as  to  prevent  any  fall  in  its  value. 

SILVER    HAS    ALWAYS    FLUCTUATED    IN    VALUE. 

The  aforesaid  facts  and  principles  explain  the  phenom- 
ena which  have  been  a  mystery  to  many ;  viz.,  what 
have  been  called  "recent  fluctuations"  in  the  value  of  a 
metal  which  for  so  long  a  time  has  been  regarded  as  having 
a  fixed  value. 

Silver  and  gold  have  both  always  been  subject  to  fluctua- 
tions in  value.  So  long  as  a  legal  price  was  afifixed  to  both  of 
them,  these  fluctuations  were  obscured  by  what  is  called 
the  "  par  value  test."  Besides  that,  the  actual  changes  in 
the  value  of  a  currency  composed  of  both  gold  and  silver 
are  less  than  the  changes  in  value  of  a  single  metal.  To 
make  what  is  called  "  the  fluctuation  of  silver  "  appear  still 
greater,  a  combination  of  new  conditions  have  been  placed 
around  gold,  all  of  which  have  tended  in  one  direction  ;  viz., 
to  enhance  its  value. 

The  legislative  change  of  existing  contracts  produced  by 
demonetizing  silver  and  thus  raising  the  value  of  the  re- 
maining legal-tender  metal  is  not  the  only  nor  the  greatest 
evil  inflicted  on  its  citizens  by  a  nation  which  adopts  such  a 
policy.  By  ceasing  to  use  two  legal-tender  metals,  and  us- 
ing only  one,  a  nation  reduces  by  one-half  the  total  volume 
of  metal  from  which  to  coin  its  legal  tender.  As  before 
illustrated  by  bodies  of  water  of  different  sizes,  a  small 
amount  of  metal  is  more  susceptible  to  changes  of  condi- 
tion than  a  large  amount.  Changes  in  its  value  are  there- 
fore more  easily  produced,  occur  more  frequently,  and  are 
greater  in  degree. 

Since   England,  in   18 16,  adopted  gold  as  the  sole  legal 


264 


SOCIAL  STRUGGLES. 


tender,  the  value  of  her  currency  has  been  subject  to 
greater  fluctuations  than  that  of  any  other  nation.  Prof. 
Jevons,  himself  a  native  and  resident  of  England,  says: 

"  It  is  certain  that  the  sensitiveness  of  the  money  market  will  increase, 
and  it  is  probable  that  commercial  crises  will  from  time  to  time  recur, 
even  exceeding  in  their  violence  and  disastrous  consequence  those  whose 
history  we  know  too  well." 

The  advocates  of  a  single  gold  standard  invite  us  to  step 
upon  this  "sensitive"  foundation  which  leads  to  such  fre- 
quent panics. 

WHY  ENGLAND  HAS  A  GOLD  CURRENCY. 

Why  does  England  maintain  gold  as  the  sole  legal  tender 
when  experience  has  shown  that  such  a  course  creates 
great  changes  in  the  value  of  her  money  ? 

England  has  largely  increased  in  wealth  since  she  adopted 
the  gold  policy.  But  she  has  had  severe  panics  every  five 
or  ten  years  since  that  time.  Her  wealth  is  mostly  in  few 
hands.  The  rich  are  very  rich  and  the  poor  very  poor. 
There  is  an  appalling  amount  of  pauperism.  England  is 
governed  by  the  rich  and  by  an  aristocracy.  These  persons 
believe  that  a  few  should  govern  the  country,  and  that  it  is 
better  for  those  few  to  own  most  of  the  wealth  of  the 
country.  A  gold  policy  is  in  harmony  with  these  ideas  be- 
cause it  makes  it  easier  to  carry  them  out.  English  ideas 
and  institutions  have  many  rich  and  snobbish  admirers  in 
this  country.  These  persons  are  almost  unanimously  in 
favor  of  making  gold  the  sole  legal  tender. 

A  gold  policy  makes  it  easier  for  a  rich  man  to  grow 
richer  and  harder  for  a  poor  man  to  become  rich,  because, 
under  it  the  amount  of  money  in  circulation  is  subject  to 
frequent  and  rapid  changes.  This  causes  great  fluctuations 
both  in  the  "prices  of  commodities  and  labor,  and  in  the 
rate  of  interest  for  money.  Fluctuating  prices  operate 
specially  to  the  disadvantage  of  the  poor,  and  persons  in 
very  moderate  circumstances.  The  rich  can  take  advan- 
tage of  a  fall  in  prices  to  buy,  and  of  a  rise  in  prices  to  sell 


A  DECEITFUL  CRY. 


265 


property.  But  a  poor  man,  or  a  business  m'an  with  little 
capital  of  his  own,  is  often  driven  by  his  necessities  to  buy 
and  sell  at  a  disadvantage.  He  is  also  often  forced  to  pay 
exorbitant  rates  of  interest  to  prevent  an  utter  sacrifice  of 
his  business  and  property. 

Those  who  ascribe  all  our  troubles  to  the  coinage  of  the 
silver  dollar  should  remember  that  the  industrial  classes 
of  England  are  far  worse  off  than  those  of  this  country. 

SHOULD   WE    MAKE   TIMES    HARDER   IN    EUROPE? 

It  has  been  urged  by  many  persons  that  we  should  stop 
the  coinage  of  silver  for  the  express  purpose  of  making 
times  in  Europe  still  harder  than  at  present,  and  thus  in- 
ducing her  remonetization  of  silver  by  internatio-nal  agree- 
ment. 

But  it  should  be  borne  in  mind  that  the  distress  in  Eu- 
rope caused  by  the  rise  in  value  of  gold  enriches  the  cred- 
itor classes  ;  and  these  are  the  classes  which  dictate  Euro- 
pean policy.  These  persons  would  like  to  have  their  bonds 
made  still  more  valuable  than  at  present.  Moreover,  such 
a  proceeding  would  increase  the  robbery  of  the  debtors  and 
tax-payers  of  this  country. 

It  is  a  suspicious  circumstance  that  nearly  every  one  who 
originally  denounced  the  Silver  Bill  of  1878  is  now  raising  a 
doleful  wail  for  its  repeal,  under  pretense  of  a  desire  to 
compel  other  nations  to  coin  silver.  As  Falstaff  said : 
"  How  this  world  is  given  to  lying." 

ARE   PAYMENTS   IN    SILVER   HONEST? 

For  several  years  a  cry  has  been  raised  that  payment  of 
debts  with  silver  dollars  would  be  a  dishonest  thing  for  the 
United  States  Government,  or  for  private  individuals,  to  do. 
The  denunciation  of  those  who  advocate  the  payment  of 
Government  bonds  in  silver  dollars  has  been  especially 
fierce.  The  national  administration  has  thus  far  been  con- 
ducted on  the  theory  that  silver  dollars  cannot  rightfully 
be  used  in  payment  of  bonds  ;  and  consequently  many  mill- 
ions of  silver  have  lain  idle  in  the  vaults  while  interest-bear- 


266  SOCIAL  'STRUGGLES. 

ing  bonds  were  due.     Let  us  examine  the  facts  of  this  mat- 
ter. 

In  the  first  place,  it  is  clear  that  the  United  States  Gov- 
ernment is  bound,  in  honor,  to  do  precisely  as  it  agrees. 
The  evidence  of  the  agreement  is  the  written  bond  to 
which  every  bondholder  gave  his  assent  when  he  bought 
and  accepted  it.  If  the  Government  pay  less  than  agreed, 
it  robs  the  bondholders  ;  if  it  pay  more  than  agreed,  then 
it  robs  the  tax-payers. 

Nearly  all  the  outstanding  Government  bonds  were  is- 
sued by  authority  of  law  passed  in  1870.  These  bonds 
bear  upon  their  face  in  conspicuous  letters,  this  inscription : 
"  This  bond  is  issued  in  accordance  with  the  provisions  of 
an  act  of  Congress,  entitled,  'An  act  to  authorize  the  re- 
funding of  the  national  debt,'  approved  July  14,  1870 ; 
amended  by  an  act  approved  January  20,  1871,  and  is  re- 
deemable at  the  pleasure  of  the  United  States,  after,  etc., 
in  coin  of  the  standard  value  of  the  United  States  on  said 
July  14,  1870,  with  interest  in  such  coin."  This  constitutes 
the  contract  between  the  Government  and  the  bondholders. 
It  shows  upon  its  face  that  it  was  contemplated  that  Con- 
gress might  change  the  standard  of  value,  and  that  it  was 
expressly  stipulated  that  the  legal  coins  of  July  14,  1870, 
were  agreed  upon  as  the  means  of  paying  both  principal 
and  interest.  On  July  14,  1870,  there  were  two  legal-ten- 
der coins,  either  of  which  could  be  lawfully  tendered  in  pay- 
ment of  debt,  viz.,  the  silver  dollar  of  412)^  grains  or  the 
gold  dollar  of  25  8-IO  grains. 

At  that  time,  the  silver  dollar  was  worth  2  67-100  per 
cent,  more  than  the  gold  dollar.  The  money-lending  inter- 
est made  no  effort  to  have  the  word  "  gold"  inserted  in  the 
bonds.  They  evidently  preferred  to  have  it  worded  as  it  is. 
In  the  light  of  their  conduct  since  that  time,  it  is  certain 
that  if  events  had  made  the  gold  dollar  worth  considerably 
less  than  the  silver  dollar,  that  the  bondholders  would  now 
denounce  the  gold  dollar  as  "  dishonest." 

A  agrees  to  deliver  B  1000  tons  of  coal,  one  year  hence, 
at  $5  per  ton.     When  the  year  expires,  if  coal  is  worth  $6 


I 


SUPERIORITY  OF  WRITTEN  CONTRACTS. 


267 


per  ton,  A  is  both  legally  and  morally  bound  to  deliver  the 
coal  at  $5  per  ton.  If  coal  is  then  worth  $4  per  ton,  B  is 
both  legally  and  morally  bound  to  receive  and  pay  for  it  at 
the  rate  of  $5  per  ton.  Suppose  C  should  rent  his  farm  to 
D  and  agree  to  receive  either  200  bushels  of  wheat  or  400 
bushels  of  corn  for  the  yearly  rent,  D  to  have  the  option 
of  selecting  the  kind  of  grain.  If  corn  fell  in  price  so  that 
400  bushels  of  it  were  worth  less  than  200  bushels  of  wheat, 
C  would  have  neither  legal  nor  moral  right  to  refuse  to  re- 
ceive the  corn  as  agreed.  Every  principle  of  law  and  equity 
in  these  assumed  cases  applies  to  the  bondholders.  The 
incidental  and  unavoidable  risks  of  contracts  should  be  borne 
by  them  just  the  same  as  by  other  citizens.  Every  pur- 
chaser of  a  coin  bond  agreed  thereby  to  receive  payment 
therefor  of  the  number  of  "dollars"  on  the  face  of  it. 
These  "  dollars  "  were  to  be  represented  by  25  8- 10  grains 
of  gold,  or  by  41 2_^  grains  of  silver.  The  option  of  select- 
ing the  kind  of  dollar  rested  with  the  Government. 
Whether  silver  have  risen  or  fallen  in  value,  is  not  a  ques- 
tion which  the  bondholders  have  a  right  to  raise  ;  they 
made  their  own  bargain  and  are  now  bound  to  abide  by  it. 

WRITTEN   CONTRACTS    MORE    RELIABLE    THAN   VAGUE    UN- 
DERSTANDINGS. 

It  is  claimed  that  there  was  "  an  understanding  "  that  the 
bonds  were  to  be  paid  in  gold.  This  is  urging  the  Govern- 
ment to  adopt  a  principle  that  not  one  of  those  who  so 
urge  would  adopt  for  a  moment  in  the  conduct  of  his  own 
private  affairs.  If  after  entering  into  clear  and  explicit 
written  contracts,  a  man,  or  a  government,  should  permit 
the  setting  aside  of  such  contracts,  and  the  substitution 
therefor  of  vague  '*  understandings,"  all  business  would  be 
reduced  to  chaos.  It  would  be  impossible  to  decide  just 
what  those  indefinite  understandings  were. 

What  is  true  of  the  national  debt  is  largely  true  of  State, 
city  and  private  debts.  The  great  majority  of  them  were 
created  under  the  contract  of  the  debtor's  option  to  dis- 
charge them  either  in  gold  or  silver.     Equity  requires  that 


268  SOCIAL  STRUGGLES. 

original  contracts  be  executed  as  agreed  upon.  A  great 
cry  has  been  raised  that  such  a  course  would  be  "  dishon- 
est "  because  it  would  be  payment  in  "the  cheapest  kind 
of  money."  But  the  creditors  have  invariably  lent  the 
''  cheapest  kind  of  money."  They  never  lent  silver,  when 
gold  was  cheapest ;  nor  gold,  when  paper  would  answer. 
Why  then  should  not  the  same  privilege  be  granted  the 
debtors  ? 

A   MAN   CANNOT   LOSE   WHAT   HE   NEVER   OWNED. 

Elaborate  tables  have  been  published  showing  how  much 
the  national  bondholders  and  different  classes  of  other 
creditors  would  "  lose  "  if  silver  should  be  used  instead  of 
gold.  A  man  cannot  "  lose  "  something  he  never  possessed. 
As  a  matter  of  fact,  the  Government  bonds  were  originally 
paid  for  in  paper  money,  worth,  on  an  average,  over  thirty 
per  cent,  less  than  the  silver  dollar  then  was.  If  paid  in 
silver,  the  national  bondholders  will  merely  "  lose  "  an- 
opportunity  to  take  from  the  tax-payers  and  debtors  some- 
thing to  which  they  have  neither  legal  nor  moral  right.  A 
similar  thing  is  true  of  other  classes  of  creditors. 

DIFFERENCES   IN   RELATIVE  VALUE   OF   GOLD   AND   SILVER. 

As  one  of  the  chief  arguments  in  favor  of  demonetizing 
silver,  it  has  often  been  said  that  a  bi-metallic  currency 
occasions  great  losses  and  inconvenience  because  the  two 
metals  are  liable  to  vary  in  value  with  regard  to  each  other; 
and  thus  a  nation  with  both  gold  and  silver  as  legal  tenders 
is  liable  to  have  changes  occur  in  its  kind  of  money, — gold 
displacing  silver  and  silver  displacing  gold.  Several  plain 
facts  are  a  sufficient  answer  to  this  argument. 

First.  The  material  of  which  a  nation's  money  is  com- 
posed is  secondary  in  importance  to  the  stability  in  value 
of  that  money.  When  a  change  occurs  in  consequence  of 
the  appreciation  of  one  of  the  metals  relatively  to  the  other, 
justice  requires  that  the  one  remaining  most  stable  shall  be 
employed.  So  long  as  both  metals  are  legal  tenders  with- 
out limit,  a  sudden  change  in  their  relative  value  is  impos- 


HOW  WE  HARNESS  HORSES  AND  OXEN. 


269 


sible,  because  the  disuse  of  one  metal  in  one  country  will 
at  once  liberate  a  large  amount  of  that  metal  for  use  in 
another  country,  and  thus  nearly  restore  the  equilibrium. 
The  dire  commercial  distress  of  the  United  States  in  1876, 
1877,  and  1878  was  chiefly  due  to  our  engaging  in  a  fierce 
competition  with  European  nations  for  a  supply  of  gold, 
enhanced  in  value  by  such  a  struggle.  If  we  had  not 
demonetized  silver  in  1873,  the  silver  dollar  would  soon 
have  become  our  metallic  money,  and  prices  in  Europe  and 
America  would  not  have  fallen  as  a  result  of  struggles  to 
keep  and  get  gold.  We  should  have  let  Europe  quietly 
keep  it,  until  without  any  disturbance  it  came  to  us  in 
exchange  for  commodities,  or  for  silver  needed  for  the 
East. 

Second.  It  is  almost  impossible  to  find  two  horses,  or 
two  oxen  of  precisely  equal  size,  strength  and  endurance. 
But,  in  fact,  we  constantly  harness  such  unequal  animals  in 
pairs  without  a  thought  of  the  "  absolute  impossibility"  of 
having  them  perform  an  equal  amount  of  work.  We  sim- 
ply put  an  "evener"  behind,  or  between  them,  and  thus 
obviate  all  trouble  which  might  otherwise  arise  from  differ- 
ences in  their  fleetness  or  strength.  In  like  manner,  it  is 
perfectly  feasible  to  devise  an  "evener"  which  will  obviate 
any  inconveniences  arising  from  changes  in  the  *  relative 
value  of  gold  and  silver.  It  could  be  done  throughout  the 
world  by  international  agreement.  A  single  nation,  the 
United  States,  for  instance,  could  make  an  "  evener  "  of  its 
own  which  would  always  keep  gold  and  silver  in  concurrent 
circulation. 

A  SUGGESTION   FOR   CONSIDERATION. 

At  the  risk  of  being  deemed  presumptuous,  I  venture  to 
suggest  the  following  for  consideration.  For  all  future 
contracts,  let  gold  and  silver  be-  made  semi-legal  tenders, 
/.  e.,  all  coin  debts  to  be  only  legally  payable  by  delivery  of 
one-half  their  amount  in  gold  dollars  of  25  8-10  grains,  and 
the  other  half  in  silver  dollars  of  412^  grains.  Any  con- 
tract or  device  to  avoid  this  bi-metallic  system  to  be  voidable 


2/0 


SOCIAL  STRUGGLES. 


by  either  party  as  contrary  to  public  policy.  The  debtors 
vested  option  to  pay  in  such  metal  as  he  chose  to  remain 
undisturbed  with  regard  to  all  existing  obligations. 

It  appears  that  this  would  tend  to  create  a  greater  stabil- 
ity in  the  value  of  a  given  number  of  "  dollars  "  than  exists 
under  the  present  system.  Both  kinds  of  coin  would  be 
kept  in  circulation  because  neither  creditor  nor  debtor 
could  use  silver  to  the  exclusion  of  gold,  or  gold  to  the 
exclusion  of  silver.  A  fall  in  the  value  of  one  kind  of  coin 
would  almost  inevitably  be  accompanied  by  a  correspond- 
ing rise  in  the  value  of  the  other  metal.  It  would  be  a 
mode  of  balancing,  or  compensating  a  fluctuation  in  the 
value  of  silver  by  a  reverse  change  in  the  value  of  gold. 
Both  metals  could  be  blended  by  melting  them  into  one 
coin,  but  this  has  been  deemed  impracticable  on  account 
of  the  danger  of  counterfeiting  created  by  such  a  measure. 
The  foregoing  suggestion  probably  has  some  defect  which 
would  make  it  valueless.  But  it  is  morally  certain  that 
whenever  the  people  desire  the  maintenance  of  a  bi-metallic 
currency,  in  actual  circulation,  their  combined  wisdom  will 
find  a  way  to  accomplish  such  a  purpose.  Moreover,  as 
elsewhere  pointed  out,  one  of  two  legal  tenders  is  per- 
forming an  important  duty  when  not  in  circulation,  but 
standing  guard  to  prevent  an  undue  rise  in  value  of  the 
legal  tender  actually  in  use. 

Third.  Although  we  are  daily  told  that  it  is  impossible 
to  concurrently  use  both  gold  and  silver  as  money,  yet  the 
plain  fact  is  that  it  has  been  done  from  time  immemorial. 
Substantially  nothing  was  heard  about  the  evils  of  using 
both  gold  and  silver,  until  the  creditor  classes  conceived 
the  scheme  of  increasing  their  wealth  by  demonetizing  one 
of  the  precious  metals.  The  truth  of  the  old  adage :  "  He 
that  wishes  to  whip  a  dog  can  always  find  a  stick,"  was 
thereby  again  demonstrated. 

Fourth.  If  the  allegations,  that  silver  and  gold  cannot 
be  concurrently  used  as  money,  and  that  gold  is  far  supe- 
rior to  silver  in  stability,  be  true,  it  logically  follows  that 
silver  should  be  entirely  demonetized  throughout  the  world. 


DANGERS  FROM  RASH  CHANGES.  2^1 

For  if  the  arguments  used  in  favor  of  gold  be  true,  how 
can  a  nation  with  a  gold  currency  trade  advantageously 
with  a  nation  with  a  silver  currency?  In  fact  we  are  told 
that  if  we  have  a  silver  currency,  commerce  with  gold-using 
countries  will  be  impossible.  If  this  were  so,  the  silver- 
using  nations  could  not  trade  with  England  as  they  now 
do.  Those  who  make  such  statements  forget  the  demon- 
strated fact  that  such  an  event  would  not  interrupt  our 
commerce  for  an  hour. 

RESULT   OF   ENTIRE    DEMONETIZATION   OF   SILVER. 

If  silver  were  thus  universally  demonetized,  conjoined, 
as  such  a  measure  naturally  would  be,  by  a  proportionate 
destruction  of  paper  money,  the  result  would  chiefly  appear 
in  an  enormous  fall  in  prices  and  consequent  wholesale 
confiscation  of  the  property  of  debtors.  Laborers'  wages 
would  fall  to  a  few  cents  a  day.  Every  person  materially 
in  debt  would  at  once  be  made  hopelessly  bankrupt. 
Nearly  every  nation,  State  and  city  on  the  globe  would  be 
forced  either  to  repudiate  its  indebtedness,  or  to  levy  a  tax 
so  oppressive  as  to  precipitate  a  bloody  revolution  if  a  for- 
cible attempt  were  made  to  collect  it.  In  a  short  time  all 
debts  would  be  wiped  out,  either  by  bankrupt  laws  or  by 
revolutionary  decrees.  Short-sighted  creditors  who  ex- 
pected to  seize  the  property  of  their  debtors  by  virtue  of 
the  new  contracts  thus  made  by  changing  entirely  the 
meaning  of  the  word  "dollar,"  "pound,"  etc.,  would 
probably  find  themselves  seized  by  an  outraged  people. 
After  a  period  of  anarchy,  the  world  would  clearly  see 
that  it  had  suffered  greatly,  and  gained  nothing  thereby 
but  sad  experience. 

THE  IDEA  OF  COERCING  ENGLAND. 

Many  persons  urge  that  the  United  States  should  at  once 
suspend  coinage  of  silver  for  the  express  purpose  of  still 
further  depressing  the  value  of  silver  relative  to  gold,  mak- 
ing times  still  harder  in  England,  and  thus  forcing  her  to 
remonetize  silver. 


272 


SOCIAL  STRUGGLES. 


Such  persons  forget  two  things.  First.  Harder  times  in 
England,  thus  made,  means  harder  times  for  us.  Second. 
The  men  who  would  suffer  by  still  harder  times  in  England 
are  not  the  ruling  class.  England  is  ruled  by  creditors  to 
whom  such  a  measure,  until  revolution  occurred,  would 
bring  increased  w^ealth.  If  we  could  thus  severely  pinch 
the  nobility  and  money  kings  of  England,  the  case  would 
be  different.  But  even  then  we  should  look  after  our  own 
interests  and  not  attempt  to  interfere  with  the  affairs  of 
other  nations,  except  by  setting  a  good  example. 

OUGHT   PRICES   TO    BE   DEPRESSED   BY   LEGISLATION? 

The  attorneys  of  the  money-lenders  substantially  argue 
that  as  prices  rose  in  consequence  of  the  increased  amount 
of  gold  yielded  by  the  mines  of  California  and  Australia, 
therefore  it  is  right  for  legislation  to  demonetize  silver  and 
thus  put  prices  back  where  they  were  before  1850. 

But  if  this  argument  be  a  sound  reason  for  legislative  in- 
terference with  coinage  in  behalf  of  money-lenders,  why 
stop  at  the  scale  of  prices  just  before  the  gold  mines  of  Cali- 
fornia were  discovered?  On  the  same  principle,  why  not 
go  back  to  the  scale  of  prices  prevaihng  in  the  world  be- 
fore 1492?  The  discovery  of  the  American  mines  of  gold 
and  silver  revolutionized  prices  and  commerce.  If  the 
doctrine  be  true  that  the  amount  of  metallic  money  should 
be  regulated  by  legislation,  it  follows  that  the  only  limit  to 
legislative  interference  in  that  direction  is  the  opinion  of 
law-makers. 

Suppose  we  concede  the  groundless  claim  that  silver  has 
so  increased  in  amount  that  it  would  have  fallen  in  value 
even  if  it  had  not  been  demonetized.  If  this  be  reason  for 
the  creditor  classes  to  demonetize  silver,  does  it  not  follow 
that  the  debtor  classes  have  an  equal  right  to  protection  ? 
Have  they  not  a  right  to  say :  "  Gold  mines  are  failing, — 
gold  is  growing  scarcer  and  dearer ;  let  us  diminish  the 
weight  of  the  gold  coins." 


ANOTHER  DELUSIVE  CRY. 


THE   BEST   KIND   OF   MONEY. 


273 


A  ballot  taken  among  a  pack  of  wolves  would  always  show  una- 
nimity in  support  of  the  proposition,  that  sheep  should  be  allowed  un- 
limited freedom  and  not  be  hampered  and  injured  by  the  restrictions  of 
armed,  vigilant  and  odious  shepherds. 

The  advocates  of  making  gold  the  sole  legal  tender  never 
weary  of  reiterating  that  such  a  policy  would  give  us  the 
"best  kind  of  money."  Let  us  see  what  this  phrase  means. 
For  whom,  for  what  classes,  is  gold  the  "  best  "  money  ?  It 
is  undoubtedly  thought  "  best  "  for  some  persons  else  they 
would  not  desire  it.  The  conduct  of  mankind  is  largely 
controlled  b}-  selfish  considerations.  Hence,  when  we  see 
a  class  of  persons  who  eagerly  labor  for  the  adoption  of  a 
'  certain  policy,  it  is  safe  to  presume  that  such  a  policy  in 
their  opinion  is  "  best  "  for  them. 

Money  which  is  "  best  "  for  one  class  of  persons  is  not 
necessarily  best  for  the  whole  community.  Money  that 
is  easily  counterfeited  is  undoubtedly  the  "  best  kind  of 
money  "  for  those  who  wish  to  get  their  living  by  counter- 
feiting ;  but  for  all  other  classes  that  money  is  best 
which  is  most  difficult  to  counterfeit  with  impunity. 

Money  which  is  steadily  and  inevitably  increasing  in  value 
is  "  best  "  for  those  who  own  large  amounts  of  bonds  and 
mortgages.  While  such  an  event  does  not  alter  the  nom- 
inal value  of  their  securities,  and  is  therefore  often  unnoticed 
and  always  superficially  fair,  it  nevertheless  does  change 
their  real  value.  For  a  man  who  loaned  $100,000,  due  ten 
years  thereafter,  when  an  average  day's  labor  of  a  common 
laborer  was  worth  one  dollar,  that  money  is '' best  "  which 
will  enable  him  when  the  loan  is  repaid  to  buy  with  it  the 
equivalent  of  120,000  days'  labor.  But  such  money  is  not 
"  best  ''  for  the  debtors  who  are  thus  obliged  to  pay  the 
equivalent  of  20,000  days'  labor  more  than  received  when 
they  borrowed  the  money. 

For  the  purpose  of  speculators  who  have  bought  prop- 
erty to   be   delivered    in    future,    that    money   is    "  best " 


274 


SOCIAL  STRUGGLES. 


which  is  rapidly  depreciating  in  value.  By  such  arn  event, 
the  market  price  of  what  they  have  agreed  to  take  at  a 
fixed  price  is  raised  above  the  stipulated  sum,  and  a  profit 
thus  made  for  them.  This  is  so  because  their  agreement 
was  not  to  pay  a  fixed  amount  of  value  for  the  purchase, 
but  a  fixed  number  of  "dollars";  no  matter  how  much 
these  "  dollars  "  may  have  fallen  in  value,  payment  of  the 
number  named  in  the  contract  legally  entitles  them  to  the 
property. 

Money  which  can  most  easily  be  "cornered"  is  "best" 
for  those  who  wish  to  create,  at  will,  fluctuations  in  the 
stock  and  produce  market.  The  smaller  the  amount  of 
legal  tender,,  the  more  readily  such  schemes  can  be  success- 
fully consummated. 

Those  whose  business  is  to  deal  in  money,  bills  of 
exchange,  stocks,  bonds ;  and  to  continually  buy  and  sell 
all  kinds  of  portable  property,  find  profit  in  constant  fluctu- 
ations in  the  value  of  money,  and  consequent  incessant 
changes  of  market  prices.  Sometimes  they  lose  largely  by 
such  changes  ;  but,  as  their  facilities  for  acquiring  and  act- 
ing on  information  in  regard  to  the  markets  are  usually 
better  than  those  of  the  general  public,  on  the  average, 
they  make  a  profit  out  of  these  fluctuations.  This  is  done 
by  continually  throwing  the  losing  side  of  said  fluctuations 
on  the  laborers,  farmers,  manufacturers  and  others  whose 
occupations  tend  to  lead  them  to  think  more  about  the 
general  usefulness  of  things  than  about  the  changes  in 
market  prices.  For  such  traders,  that  money  is  "best" 
which  fluctuates  most  largely  and  most  frequently  in 
amount. 

STABLE   MONEY   BEST   FOR   THE   MASSES. 

The  interests  of  the  great  majority  of  the  community 
are  different  from  those  of  the  aforesaid  classes.  For  the 
masses,  that  money  is  "  best "  which  is  most  stable  in  value. 
Fluctuations  in  the  value  of  money  produce  fluctuations 
in  the  prices  of  all  things  bought  and  sold ;  and,  on  the 
whole,  the  general  public  are  the  losers  by  such  changes  in 


JVJ/y  MEN  THINK  DIFFERENTLY.  275 

prices.     A  few  alert  and  cunning  traders  gain  by  changing 
prices,  and  this  gain  is  always  some  one's  loss. 

A   STABLE    CURRENCY   BEST   FOR   DEBTORS. 

It  is  imagined  by  some  persons  that  debtors  are  bene- 
fited by  a  depreciating  currency.  A  few  debtors  may  thus 
receive  benefit  ;  but,  on  the  average,  the  interests  of  debt- 
ors are  best  promoted  by  a  currenc^^  stable  in  value.  Debt- 
ors undoubtedly  have  one  interest  in  the  direction  of 
money  falling  steadily  in  value;  but  the  preponderance  of 
their  interests  lies  in  favor  of  securing  the  greatest  possible 
uniformity  in  the  value  of  money.  To  a  merchant,  largely 
in  debt  for  the  goods  in  his  store,  the  benefit  derived  from 
public  prosperity  largely  outweighs  any  advantage  he 
might  derive  from  paying  his  debts  in  money  less  valuable 
than  when  he  bought  the  goods.  His  aim  is  to  maintain 
steady  sales  and  get  the  difference  between  the  wholesale 
and  the  retail  price  of  his  goods.  Anything  which  is  not 
to  the  public  interest  tends  to  diminish  his  sales  in  propor- 
tion to  the  injury  thereby  inflicted  on  the  public.  Thus 
the  debtor's  interests  are,  on  the  average,  identical  with 
the  interests  of  the  public  ;  viz.,  they  are  best  promoted  by 
a  stable  currency. 

WHY   DIFFERENT   CLASSES    HAVE   DIFFERENT   IDEAS. 

The  foregoing  considerations  explain  why  different 
classes  have  different  ideas  as  to  what  constitutes  the  "  best 
kind  of  money."  Men's  actions  are  usually  the  best  indi- 
cation of  their  thoughts  and  wishes.  From  whence  did  the 
movement  for  making  gold  the  sole  legal  tender  originate  ; 
and  by  whom  has  it  been  carried  on  ?  Before  looking  for 
an  answer  to  this  question,  we  should  naturally  expect  that 
those  whose  wealth  would  be  increased  by  a  currency  rising 
in  value,  most  easily  controlled,  and  subject  to  the  greatest 
fluctuations  in  purchasing  power  would  be  the  ones  to 
favor  a  currency  possessed  of  those  attributes.  We  should 
not  expect  such  persons  to  zealously  advocate  a  stable  cur- 


276 


SOCIAL  STRUGGLES. 


rency,  because    that  would  not  best  promote  their  selfish 
interests. 

A   NOTORIOUS   FACT. 

The  notorious  and  undisputed  fact  is  that  those  who 
originated  and  have  maintained  the  movement  toward 
making  gold  the  sole  legal  tender,  are  precisely  the  classes 
whose  interests  are  best  served  by  an  appreciating  and  a 
fluctuating  kind  of  money.  The  money-lenders,  the  bank- 
ers, the  speculators  and  the  brokers,  are  the  chief  advocates 
of  gold.  Where  silver  has  been  demonetized,  we  find  that 
such  a  step  was  not  originated  by  the  people  ;  but  by  the 
bankers,  brokers,  money-lenders  and  their  various  attorneys. 
Foxes  do  not  spend  a  great  deal  of  time  and  labor  in  devis- 
ing means  for  the  protection  of  quail,  partridges  and  other 
animals  they  feed  upon.  When  a  bankers'  convention  says 
that  gold  is  the  "  best  money,"  it  means,  in  reality,  that 
it  is  best  for  the  bankers  and  those  with  kindred  interests. 

The  conspiracy  for  creating  money  "  best "  for  the  con- 
spirators will  come  to  naught  whenever  the  majority  of  the 
people  fully  see  that  the  money  "  best  "  for  a  few  is  adverse 
to  the  interests  of  the  many. 

A   LETTER   FROM   AN    "ECONOMIST.' 

The  following  letter  is  a  good  sample  of  the  kind  of 
argument  commonly  used  to  prove  that  gold,  as  the  sole 
legal  tender,  is  the  best  kind  of  money  for  the  laboring 
classes. 

"  In  a  recent  article  in  the  Sun,  entitled  the  '  Cry  of  the  Savings  Bank 
Presidents,'  and  in  opposition  to  their  petition  against  the  further  coinage 
of  silver,  I  find  the  following  : 

"  '  What  the  petitioners  fear  is  evidently  the  depreciation  of  deposits, 
which  they  think  would  be  caused  by  the  victory  of  the  silver  standard. 
They  assume  that  the  dollars  which  are  now  worth  125  cents  would  sink 
to  100  cents,  and  depositors  would  lose  the  difference.' 

"  In  thus  asserting  or  assuming  that  there  are,  or  may  be,  two  kinds 
of  dollars  in  circulation,  one  worth  125  cents  and  the  other  100  cents,  you 
effectually  knock   out,   it   seems  to  me,  from   under   the   advocates   of 


THE  LABORING  MAN'S  INTEREST. 


277 


further  or  unlimited  silver  coinage  every  support  to  their  position.     Let 
us  reason  about  it  a  little. 

"  When  any  person,  more  especially  one  who  depends  upon  the 
results  of  each  day's  toil  to  meet  each  day's  needs,  earns  a  dollar  by  his 
labor,  what  sort  of  a  dollar  is  he  entitled  to  receive  }  Manifestly  the  very 
best  dollar.  Manifestly,  further,  the  laborer  or  bread  earner,  whoever  he 
may  be  or  wherever  he  may  live  in  all  this  great  country,  can  now  have 
the  best  dollar  of  125  cents  (purchasing  power)  just  as  readily  and 
cheaply  as  he  can  have  the  other  kind  of  a  dollar,  presently  or  prospec- 
tively worth  less ;  and  he  can  continue  to  have  it  just  so  long  as  nothing 
is  done  to  impair  the  power  of  the  national  treasury  to  exchange  silver 
for  gold  on  demand.  Now  why  should  the  laborer  be  willing  to  abate 
anything  of  this  privilege  }  And  is  not  the  man  who  advocates  a  poHcy 
whereby  the  laborer  is  compelled  to  receive  a  dollar  inferior  to  the  best 
inflicting  an  injury  upon  him .'     Is  he  not  the  workingman's  enemy  ? 

"  Again,  the  laboring  man  is  told  that  he  should  favor  free  or  continued 
coinage  of  silver,  because  the  '  gold  bugs  '  don't  want  silver.  But  is  not 
the  argument  based  on  such  an  averment  all  the  other  way  ?  A  gold 
bug  is  one  who  is  credited  with  knowing  all  about  money  and  looking 
sharp  after  his  own  interests.  Well,  if  the  gold  bug  is  satisfied  that  a 
gold  dollar  is  best  for  him,  and  the  laborer  can  have  a  gold  dollar  for 
every  one  hundred  cents  that  are  due  him,  as  he  now  can  for  the  asking, 
why  are  not  the  interests  of  the  gold  bug  and  the  laborer  one  and  the 
same  ?  Is  it  a  good  reason  because  the  gold  bug  wants  roast  beef  and 
plum  pudding  that  the  laboring  man  should  be  asked  to  content  himself 
with  brown  bread  and  raw  turnips  ?  Can  you  furnish  me  or  your  readers 
with  a  pair  of  spectacles  that  will  make  this  business  of  continued  silver 
coinage  look  differently.'* 

"David  A,  Wells. 

"  Norwich,  yl/arc/^,  1886." 

In  the  first  paragraph  of  what  he  is  pleased  to  call  "  rea- 
son," Mr.  Wells  informs  us  that  a  laborer  can  get  a  dollar 
worth  125  cents  just  as  ''  readily  and  cheaply"  as  one  worth 
100  cents.  This  statement  necessarily  implies  that  a 
laborer  can  obtain  as  many  dollars,  worth  125  cents  each, 
for  a  week's  wages  as  he  could  obtain  for  the  same  labor  if 
those  dollars  were  worth  only  100  cents  each.  If  this 
assumption  were  true  125-cent  dollars  would  clearly  be  to  a 
laborer's  interest.  Furthermore,  it  would  be  to  the  work- 
man's interest  to  further  contract  the  currency  so  that  a 
dollar  would  be  worth  150  or  200  cents. 

The  only  difficulty  with  Mr.  Wells'  assumption  is  that  it 


278 


SOCIAL  STRUGGLES. 


is  not  true.  The  number  of  dollars  paid  a  laborer  for  a 
week's  wages  depends  on  the  value  of  each  one  of  those 
dollars.  The  higher  the  value  of  the  dollar,  the  smaller  the 
number  of  those  dollars  paid  for  a  given  amount  of  work. 
Hence  there  is  no  truth  in  the  assertion  that  125-cent  dol- 
lars can  be  had  as  "cheaply"  as  dollars  worth  100  cents 
each.  Employers  are  not  in  the  business  of  giving  125 
cents'  worth  of  money  for  100  cents'  worth  of  work.  The 
greater  the  value  of  a  dollar  the  greater  the  number  of 
hours'  labor  must  be  given  in  exchange  for  one. 

Mr.  Wells  next  informs  us  that  "  the  interests  of  the  gold 
bug  and  the  laborer  are  one  and  the  same."  That  is,  the 
interests  of  the  owners  of  the  eight  thousand  millions  of 
national,  State,  municipal  and  rail  road  bonds,  due  from  the 
people  of  this  country,  are  identical  with  the  interests  of 
those  whose  labor  must  directly  or  indirectly  pay  both 
interest  and  principal  of  those  bonds.     Is  this  true? 

If  every  one  of  the  "  dollars,"  which  in  the  aggregate 
form  this  vast  public  debt,  be  worth  100  cents,  and  at  the 
same  time  an  average  day's  wages  be  worth  100  cents,  then 
eight  thousand  million  days'  labor  will  pay  these  bonds. 
But  if  we  increase  the  value  of  each  one  of  the  "  dollars  " 
constituting  those  bonds  to  125  cents,  then  it  will  require 
ten  thousand  millions  of  days'  work  to  discharge  this  debt. 
By  increasing  the  value  of  a  dollar  to  125  cents,  the  bond- 
holders have  increased  the  value  of  their  bonds  to  the 
extent  of  two  thousand  millions  of  days'  labor.  Are  the 
interest-6  of  those  who  are  to  receive  this  extra  two  thou- 
sand millions  of  days'  work  identical  with  the  interests  of 
those  upon  whom  this  additional  burden  has  been  laid  and 
who  must/^rj/  it  from  reduced  wages? 

The  laborers  of  this  country  owe  a  great  number  of  "  dol- 
lars." When  this  debt  was  created  each  one  of  these  "  dol- 
lars "  represented  a  certain  number  of  hours'  labor.  Is  it 
to  the  laborers'  interest  to  increase  the  number  of  hours' 
work  which  must  be  paid  for  a  dollar,  and  thus  increase  the 
amount  of  work  which  will  have  to  be  performed  to  cancel 
said  debt  ? 


CHANGING  THE  MEANING  OF  A   WORD. 


279 


Mr.  Wells  argues  that  when  the  meaning  of  the  term 
"one  dollar"  is  so  changed  that  it  really  means  125  cents, 
those  who  owned  or  had  due  them  thousands  of  millions 
of  those  "  dollars "  do  not  profit  by  such  a  change  any 
more  than  those  who  had  no  "  dollars  "  on  hand,  and  who 
must  buy  these  enhanced  dollars  by  giving  more  hours' 
work  for  each  one  of  them.  He  labors  to  persuade  us  that 
when  a  debt  of  one  hundred  dollars  is  changed  by  sly  legis- 
lation to  a  debt  of  one  hundred  and  twenty-five  dollars,  the 
creditor  and  the  debtor  have  the  same  interest  in  this  ras- 
cality. 

Mr.  Wells  omits  stating  the  vital  point ;  to  wit,  that  when 
legislation  practically  changed  the  meaning  of  the  term 
"one  dollar,"  the  number  of  those  dollars  paid  for  a  week's 
or  a  year's  wages  was  diminished,  but  the  number  of  those 
dollars  due  the  owners  of  evidences  of  debt  remained  un- 
changed. 

Mr.  Wells  and  his  co-laborers  are  like  Louis  XVI.  A 
revolution  is  in  progress  and  they  are  oblivious  of  the  fact. 
The  American  people  have  fairly  begun  to  think  for  them- 
selves. Pretenders  to  a  monopoly  of  economic  knowledge 
will  not  be  able  to  mislead  them  in  future  as  easily  as  they 
have  heretofore.  They  are  beginning  to  see  that  a  legal 
restriction  of  the  number  of  either  gold  or  silver  dollars  may 
be  "  best "  for  a  fciv,  because  it  silently  increases  the  value 
of  their  property  and  lowers  the  value  of  that  of  all  other 
persons. 


CHAPTER  X. 

Is  Money  Capital  ? — Nature  of  Capital. — Similarity  between  Money  and 
Blood. — Money  helps  Production  without  forming  Part  of  Products. — 
No  kind  of  Capital  produces  without  Labor. — Many  kinds  of  Capital 
have  special  Functions. — All  Hoarded  Things  are  Useless  when 
Hoarded. — A  useless  Thing  is  not  Capital.— When  Money  is  used. — 
The  true  Test  of  Money. — Control  of  Money  is  Control  of  Labor. — 
How  Money  may  be  Controlled. — Who  should  control  the  Amount 
of  Money. — The  true  Doctrine. — Jeffersonian  Democracy. — A  Con- 
servative Measure. 

A  single  false  premise  may  be  the  parent  of  a  long  train  of 
evils. 

It  is  generally  taught  that  money  is  not  capital.  A 
recent  writer  of  an  orthodox  treatise  on  money  says  : 

"  Except  in  a  qualified  and  peculiar  sense,  money  is  not  capital.  It 
has  no  direct  agency  in  production  ;  does  not  enter  as  a  constituent  part 
into  the  products  of  industry,  like  iron  or  cotton.  Of  itself,  it  produces 
nothing  ;  brings  no  gain  to  the  holder.  What  is  called  interest  is  earned 
wholly  by  capital,  and  is  paid  exclusively  out  of  the  profits  of  the  latter. 
He  who  has  money  and  wishes  to  obtain  an  income  from  it,  exchanges 
it  without  delay  for  capital.  For  the  purpose  of  hoarding,  without  refer- 
ence to  use,  it  is  worth  no  more  than  any  other  measur  say  a  bundle 
of  yardsticks." 

The  above  quotation  misstates  an  elementary  principle 
and  propounds  a  doctrine,  the  general  belief  in  which  has 
led  to  serious  legislative  errors.  Taws  have  been  made 
based  on  the  assumption  that,  as  money  is  not  capital, 
meddling  with  money  is  not  an  interference  with  capital. 

NATURE    OF   CAPITAL. 

In  our  study  heretofore  of  the  nature  and  attributes  of 
capital,  we  found  that  any  tool,  machine,  or  agency  which 
makes  it  easier  for  labor  to  create  wealth  than  it  otherwise 
could,  is  capital  in  the  full  sense  of  the  term.      A  farm- 

280 


WHAT  CAPITAL  IS.  28 1 

er's  oxen,  plow,  and  cart,  are  capital ;  they  are  the  tools 
which  help  and  lighten  his  labors.  A  railroad  car  is  capital, 
because  it  facilitates  the  interchange  of  commodities  and 
thereby  aids  those  engaged  in  producing  the  necessaries 
and  comforts  of  life.  As  rapid  transmission  of  information 
is  a  potent  auxiliary  of  fruitful  industry,  the  telegraph  is 
capital.  Money  is  capital,  because  money  is  used  as  a  rep- 
resentative, and  as  a  storehouse  of  labor ;  and  because 
money  makes  it  easier  for  mankind  to  exchange  labor  and 
the  products  of  labor  than  it  would  be  by  barter.  Money 
facilitates  the  creation  of  wealth  by  acting  as  a  distributing 
agent. 

SIMILARITY   BETWEEN   MONEY   AND   BLOOD. 

The  function  of  an  animal's  blood  is  to  carry  and  bring 
materials  of  various  kinds  to  and  from  all  parts  of  the  or- 
ganism. Money  performs  a  similar  duty  for  the  body  of 
society  that  blood  does  for  the  body  of  an  animal.  Blood 
associates  each  part  of  an  organism  with  every  other  part, 
and  thus  renders  it  possible  to  divide  the  labor  and  func- 
tions necessary  for  maintaining  life  among  different  organs 
remote  from  each  other.  Money  performs  a  similar  duty 
for  society ;  it  makes  it  easier  for  mankind  to  associate  to- 
gether, and  to  divide  the  multitude  of  labors  requisite  to 
maintain  society  in  that  high  state  of  perfection  which  gives 
each  man,  while  performing  a  single  special  duty,  benefit 
from  the  great  variety  of  different  duties  performed  by 
other  individuals.  Money  is  the  life-blood  of  commerce. 
In  an  advanced  stage  of  society,  it  is  the  most  useful  of  all 
forms  of  capital,  because  it  is  the  medium  which  brings 
the  various  kinds  of  capital  in  relation  and  association  with 
each  other,  and  with  labor,  and  thus  enables  them  to  mutu- 
ally help  each  other. 

MONEY   HELPS   PRODUCTION   WITHOUT   FORMING   PART   OF 

PRODUCTS. 

The  aforesaid  writer  tells  us  that  money  "has  no  direct 
agency  in  production  and   does  not  enter  as  a  constituent 


282  SOCIAL  STRUGGLES. 

part  into  the  products  of  industry."  This  is  true,  but  does 
not  in  the  slightest  degree  prove  that  money  is  not  capital. 
No  one  will  deny  that  a  railroad  and  its  equipments  run- 
ning through  the  middle  of  a  fertile  and  populous  agricultural 
district  are  capital  The  railway  cars  have  no  "  direct 
agency  "  in  production, — they  neither  plow  nor  reap.  Fur- 
thermore, the  cars  and  engines  are  not  wrought  into  "  con- 
stituent parts  of  any  of  the  products  "  of  industry.  The 
function  of  the  railroad  is  distribution.  It  carries  to  the 
farmers  the  various  things  they  need  to  cultivate  their  farms, 
and  to  supply  the  wants  of  themselves  and  families.  It 
carries /"rc";//  the  farmers  the  surplus  products  of  their  farms, 
and  takes  them  to  their  destination, — the  consumers  of 
those  products.  The  railroad  thus  helps  the  distant  work- 
ers in  the  factory  and  the  forge  ;  and  the  farmers  of  lands 
in  another  climate  producing  different  products,  to  hold 
commercial  intercourse  with  the  farmers  adjacent  to  its  de- 
pots. A  railroad  is  capital  because  it  helps  labor  to  associ- 
ate with  labor,  and  capital  to  associate  both  with  labor  and 
with  other  forms  of  capital.  Money  is  capital  for  the  same 
reasons  that  a  railroad  is. 

NO   KIND   OF   CAPITAL   PRODUCES   WITHOUT   LABOR. 

The  above  author  further  says  :  "  Money  of  itself  pro- 
duces nothing."  But  does  this  prove  that  money  is  not  cap- 
ital ?  Plows  of  themselves  produce  nothing.  They  are  ut- 
terly useless  unless  associated  with  labor  and  other  forms  of 
capital.  Nevertheless,  no  one  will  deny  that  plows  are  cap- 
ital of  a  very  useful  kind, — they  help  labor  produce  w^ealth. 
What  is  true  of  plows  is  true  of  all  other  kinds  of  capital  ; 
they  create  and  produce  nothing  of  themselves.  Their  use- 
fulness begins  only  when  associated  either  with  labor,  or 
with  both  labor  and  other  kinds  of  capital. 

MANY   KINDS   OF   CAPITAL   HAVE   SPECIAL   FUNCTIONS. 

Our  author  admits  that  money  in  a  "  qualified  sense  "  is 
capital.  He  thinks  money  is  capital  only  in  the  sense  that 
it  can  be  exchanged  for  capital,  and  thus  performs  only  a 


WHEN  A   THING  IS  NOT  CAPITAL. 


283 


special  function.  But  this  fact  makes  money  capital  in  all 
senses  of  the  word.  Many  kinds  and  forms  of  capital  have 
special  functions  and  duties.  A  threshing  machine  is  good 
for  nothing  whatever  but  to  thresh  grain.  A  reaper  is  good 
for  nothing  but  to  cut  grain.  A  wagon  is  good  for  nothing 
except  as  a  machine  to  facilitate  the  transportation  of  vari- 
ous things.  But  no  one  will  deny  that  threshing  machines, 
reapers  and  wagons  are  capital.  What  is  true  of  them  is 
true  of  every  other  form  and  kind  of  capital.  The  range 
of  use  to  which  different  kinds  of  capital  can  be  put  varies, 
but  all  are  controlled  by  the  same  principle  ;  limitation  to 
helping  labor  perform  special  duties. 

ALL   HOARDED   THINGS   ARE   USELESS   WHEN   HOARDED. 

The  aforesaid  teacher  also  tells  us  that  *'  for  the  purpose 
of  hoarding  without  reference  to  use,"  money  is  useless. 
This  he  appears  to  think  conclusive  evidence  that  money  is 
not  capital. 

But  is  not  this  true  of  all  other  forms  of  capital  ?  A  car- 
penter's tools  are  capital.  But  if  stored  away  in  the  garret, 
without  reference  to  use,  they  are  useless.  So  long  as 
stpred,  they  are  not  a  help  to  labor,  and  are  of  no  more 
value  than  so  many  chips.  The  machinery  of  a  factory  is 
capital.  But  if  taken  down  and  stored  "  without  reference 
to  use,"  it  is  useless.  Similar  things  are  true  of  all  other 
forms  of  capital.  So  long  as  hoarded  and  idle,  they  are 
practically  destroyed  and  useless.  What  use  would  any 
tool  or  machine  be,  if  "  stored  without  reference  to  use  "? 

It  has  been  said  that  "  if  moneybe  capital,  and  if  money 
can  be  made  of  paper,  or  other  cheap  materials,  that  an  un- 
limited issue  of  paper  money  would  create  an  unlimited 
amount  of  capital,  and  thereby  enrich  the  nation  doing  so. 
Whereas  history  shows  the  contrary  to  be  true." 

A   USELESS   THING   IS   NOT   CAPITAL. 

The  aforesaid  argument  is  the  offspring  of  ignorance  of 
the  nature  of  value  and  how  it  is  created.  A  barn  is  capital 
to  a  farmer, — it  helps  his  labors  in  storing  crops  and  shelter- 


284 


SOCIAL  STRUGGLES. 


ing  cattle.  But  because  two  or  three  barns  are  capital,  it 
by  no  means  follows  that  an  unlimited  number  of  barns 
would  be.  They  would  merely  encumber  the  ground,  and 
until  removed  would  injure  the  farm,  A  similar  thing  is 
true  of  all  other  farming  capital.  Of  what  use  would  a 
dozen  threshing  machines  be  to  a  man  who  only  needed 
one  ?  The  additional  eleven  machines  \yould  not  add  to 
the  farmer's  capital,  simply  because  they  would  not  facili- 
tate his  labors.  A  thing  is  of  no  value  unless  it  supplies  a 
want.  Its  value  therefore  depends  upon  the  conditions 
under  which  it  is  placed.  Nothing  is  capital  unless  it  sup- 
plies a  want  of  labor,  or  of  other  capital,  and  thereby  assists 
either  the  production  or  exchange  of  valuable  things. 

When  a  community  is  supplied  with  a  sufficient  amount 
of  capital  in  form  of  paper  money,  an  addition  to  the 
amount  of  that  money  would  not  add  to  their  capital. 
This  would  be  so,  for  precisely  the  same  reason  that  would 
make  an  additional  ice  house  of  no  value  to  a  man  who  al- 
ready had  one,  and  needed  no  more. 

A  queer  man  in  my  neighborhood  once  made  and  used  a 
wagon  with  five  wheels.  But  his  methods  of  thought  were 
no  more  absurd  than  the  methods  of  those  who  argue  that, 
because  one  certain  thing  is  capital,  possession  of  an  un- 
limited number  of  those  things  would  necessarily  increase 
the  capital  of  their  owner. 

Most  of  the  foregoing  mistakes  are  due  to  the  prevalent 
idea  that  money  has  mysterious  qualities.  A  man  who 
recognized  clearly  the  simple  fact  that  money  is  governed  by 
precisely  the  same  laws  that  govern  all  other  things,  would 
never  imbibe  the  error  of  supposing  that  money  is  not  cap- 
ital, in  the  fullest  sense  of  the  term. 

WHEN   MONEY   IS   USED. 

We  have  heretofore  seen  that  in  a  simple  state  of  society, 
and  under  some  circumstances,  labor  can  associate  with 
labor,  and  capital  can  associate  both  with  labor  and  with 
other  forms  of  capital,  by  means  of  barter.  As  society  ad- 
vances, its  labors  are  more  and  more  divided  among  differ- 


A/OjVEV  MAY  CONTROL  LABOR. 


285 


ent  persons,  each  performing  a  single  special  duty.  This 
renders  commercial  intercourse  between  the  different  mem- 
bers and  portions  of  society  more  difificult  and  expensive,  if 
carried  on  by  means  of  barter.  Money  has  been  invented 
to  remedy  this  difficulty?  By  its  use,  the  citizens  of  a 
populous  country,  engaged  in  a  great  diversity  of  occupa- 
tions and  inhabiting  a  large  area  of  territory,  can  associate 
commercially  with  each  other  as  freely  as  the  residents  of  a 
small  area  can  by  barter. 

THE   TRUE   TEST   OF   MONEY. 

The  excellence  of  the  quality  of  money  is  properly  meas- 
ured by  the  same  test  we  apply  to  any  other  form  of  cap- 
ital created  to  perform  a  special  duty  ;  viz.,  the  efificiency 
and  cheapness  with  which  it  performs  its  work.  A  set  of 
harness  made  of  plain  good  leather  is  capital.  Its  value,  as 
capital,  to  its  user  would  not  be  any  greater  if  it  were  plated 
wuth  gold  or  silver.  As  heretofore  shown,  mankind  have 
steadily  improved  the  excellence  of  their  money,  until  ex- 
changes by  its  use  can  generally  be  made  cheaper  than  by 
barter.  It  follows  that  wherr  a  people  have  largely  out- 
grown barter  as  a  means  of  industrial  and  commercial  inter- 
course, and  as  a  means  of  associating  the  various  forms  of 
labor  and  capital,  that  the  labor  of  that  country  is  then  de- 
pendent on  the  thing  which  has  taken  the  place  of  barter ; 
viz.,  money,  the  capital  w^hose  chief  function  is  the  associa- 
tion of  labor  and  capital.  Moreover,  as  capital  is  useless 
unless  associated  with  labor,  it  also  follows  that  the  disuse 
of  barter  makes  all  the  other  forms  of  capital  in  a  country 
largely  dependent  on  the  form  of  capital  we  call  money. 

CONTROL   OF   MONEY   IS   CONTROL   OF   LABOR. 

Therefore,  whatever  class  controls  the  money  of  a  coun- 
try controls  both  the  capital  and  the  labor  of  that  country 
to  a  large  extent.  Those  who  control  the  money  of  a  coun- 
try are  in  a  position  similar  to  that  of  a  person  w'ith  control 
of  the  blood-vessels  supplying  an  animal's  system  with  the 


286  SOCIAL  STRUGGLES. 

means  of  associating  its  different  parts  and  organs  with 
each  other. 

The  fact  has  been  partially  brought  to  public  attention 
that  when  a  few  men  control  the  railroads  of  a  country  they 
largely  control  the  means  of  communication,  and,  conse- 
quently, the  commerce  and  industry  of  that  country.  By 
an  apparently  slight  addition  to  either  freight  or  fare,  they 
can  levy  an  enormous  tribute  from  the  nation.  They  can 
thus  diminish  the  profits  of  other  forms  of  capital,  and  the 
wages  of  labor,  by  a  general  tax  on  all  property  and  persons 
transported  ;  and  this  tax  will  be  more  or  less  distributed 
until  it  reaches  every  self-supporting  person  in  the  land. 

But  railroad  control  is  of  little  influence  in  a  country, 
compared  with  the  tremendous  power  inciderit  to  the  con- 
trol of  the  money  of  a  country.  Such  a  control  means  that 
the  facilities  for  the  association  of  all  the  labor  of  that 
country,  both  with  itself  and  with  various  forms  of  capital, 
are  largely  in  the  hands  of  those  who  govern  the  capital 
called  money.  Such  a  power  is  the  more  dangerous,  be- 
cause it  can  be  so  insidiously  exerted  that  the  great  major- 
ity of  its  victims  do  not  know  the  real  source  of  their 
troubles,  and  are  prone  to  attribute  them  to  things  which 
have  no  influence  whatever. 

Large  numbers  of  workmen  have  engaged  in  strikes 
against  low  wages,  supposing  them  due  to  the  tyranny  of 
employers,  when,  in  fact,  their  employers  had  been  made 
helpless  by  those  who  controlled  their  chief  means  of  com- 
mercial intercourse  and  association.  They  have  acted  as 
men  frequently  do  when  pressed  in  a  crowd.  Instead  of 
reflecting  that  those  who  push,  do  so  because  they  are 
crowded  by  others,  they  grow  angry  and  strike  persons  who 
are  helplessly  jostled  against  them. 

•HOW    MONEY   MAY   BE   CONTROLLED. 

There  are  four  principal  means  of  controlling  the  money 
of  a  country.  First.  By  increasing  its  amount.  This  can 
be  done  by  diminishing  the  weight  and  fineness  of  coins, 
or  by  the  issue  of  paper  money.     Second.  By  diminishing 


REGULATION  OF  THE  AMOUNT  OF  MONEY.  38/ 

its  amount.  This  can  be  done  by  increasing  the  weight 
of  coins  ;  by  diminishing  the  number  of  legal  tenders,  as 
has  been  done  by  demonetizing  silver,  or  by  diminishing 
the  amount  of  paper  money.  Third,  By  changes  in  the 
rate  of  interest.  Fourth.  By  hoarding  the  money  in  exist- 
ence, thus  practically,  for  the  time  being,  diminishing  its 
amount  as  effectually  as  if  the  money  were  destroyed. 

WHO    SHOULD    CONTROL   THE   AMOUNT   OF   MONEY. 

Two  opposing  ideas  exist  in  regard  to  the  proper  method 
of  controlling  the  money  of  a  country.  One  class  of  per- 
sons say  that  the  people  are  competent  to  make  national 
and  State  constitutions  ;  to  make  civil  laws  of  all  kinds  ; 
to  direct  how  men  shall  deal  with  each  other ;  how  con- 
tracts shall  be  enforced  ;  how  laws  shall  be  administered  ; 
how  the  sexes  shall  marry  and  be  divorced  ;  how  property 
shall  be  taxed,  held,  and  divided  ;  and  how  orphans  and 
widows  shall  be  protected.  Most  of  this  class  regard  the 
idea  that  there  should  be  a  union  of  church  and  State  as  a 
relic  of  barbarism.  They  believe  the  people  are  capable  of 
regulating  their  moral  and  religious  conduct  for  themselves 
without  being  governed  by  an  oligarchy  of  priests.  They 
also  admit  that  the  people  are  competent  to  make  and  ex- 
ecute criminal  laws  ;  that  it  is  safe  to  entrust  them  with 
power  to  declare  when  a  man  shall  have  liberty  ;  when  he 
shall  be  put  in  prison,  and  when  he  shall  be  hung. 

But  although  they  concede  all  these  things,  they  hold 
that  the  people  who  use  and  are  dependent  on  the  money 
of  a  country  as  a  means  of  associating  labor  and  capital, 
and  as  a  potent  help  in  distributing  wealth,  should  not 
have  the  control  of  that  money. 

This  class  holds  that  the  amount  of  metallic  money  in  a 
country  should  be  controlled  by  the  rich  men  of  that 
country ;  that  whenever  there  is  a  probability  that  in- 
creased production  of  mines  shall  result  in  such  an  in- 
creased amount  of  coin  as  to  raise  the  wages  of  labor  and 
the  prices  of  the  products  of  labor,  that  the  Legislature 
should  interfere.'     The  character  of  this  interference,  they 


288  SOCIAL  STRUGGLES. 

hold,  should  consist  of  demonetizing  one  or  other  of  the 
legal-tender  metals  ;  or  of  increasing  the  weight  of  the 
coins,  the  extent  of  this  to  be  decided  by  the  money- 
lenders. 

This  class  further  propose  that  all  the  paper  money  of  a 
country  should  be  issued  and  controlled  by  an  oligarchy, 
and  that  the  yearly  salary  of  these  officials,  in  the  aggre- 
gate, shall  be  from  twenty  to  forty  millions  of  dollars. 
This  oligarchy  to  have  power  to  contract  or  inflate  the 
currency,  and  to  raise  or  lower  its  rate  of  interest,  at  will. 
In  other  words,  they  are  to  be  legally  invested  with  power 
to  regulate  the  association  of  labor  and  capital,  and  to  raise 
or  lower  the  prices  of  all  the  commodities,  real  estate  and 
labor  of  the  country  in  such  manner  as  may  seem  judicious 
to  their  minds  and  most  likely  to  increase  their  own 
wealth. 

These  ofifiicers  are  to  be  styled  NATIONAL  BANKERS,  and 
their  salaries  collected  and  paid  with  the  interest  on  debts, 
in  the  form  of  promissory  notes,  issued  by  themselves. 

The  foregoing  ideas  are  essentially  those  which  recently 
have  largely  controlled  the  policy  of  this  country.  On 
their  side  are  arrayed  the  majority  of  the  capitalists  ;  and, 
as  a  sequence,  the  greater  portion  of  the  politicians  and 
newspapers. 

THE   TRUE   DOCTRINE. 

The  otJicr  idea  is  that  the  people  are  competent  to  make 
laws  of  all  kinds ;  civil,  criminal,  religious  and  finan- 
cial ;  that  the  people  are  the  best  guardians  of  their  own 
interest ;  and  that  it  is  wiser,  safer,  and  cheaper  to  trust 
the  people  to  issue  money  than  it  is  to  put  their  rights 
into  the  hands  of  an  oligarchy  whose  selfish  interests  are 
often  opposed  to  the  interests  of  the  masses. 

The  masses  of  the  people  formerly  had  no  voice  in  mak- 
ing laws  of  any  kind.  Their  property,  liberty  and  lives 
were  at  the  mercy  of  a  monarch,  or  of  an  oligarchy.  For 
centuries  the  people  have  been  slowly  assuming  their  right 
of   self-government.       Although  the   idea   that    all   power 


GENUINE  DEMOCRACY. 


289 


rests  rightfully  in  the  hands  of  the  people  is  the  corner- 
stone of  American  institutions,  we  have  retained  the  mo- 
narchical principle  that  the  people  are  unfit  to  take  care  of 
themselves  financially  and  must  be  controlled  by  a  small 
class. 

The  selfish  interests  of  a  few  rich  men  are  frequently 
apparently  advanced  by  great  fluctuations  in  the  value  of 
the  national  money  ,  whereas,  the  interests  of  the  majority 
of  the  people  are  promoted  by  securing  the  greatest  possi- 
ble stability  in  the  value  of  the  currency. 

JEFFERSONIAN   DEMOCRACY. 

Those  who  fully  believe  in  genuine  Democracy  ask  that 
the  principle  of  self-government  be  carried  to  its  logical  con- 
clusion ;  that  we  take  one  step  more  in  the  direction  in 
which  the  race  has  been  progressing ;  that  as  the  people 
have  taken  control  of  civil  and  criminal  legislation,  taxa- 
tion, religion,  and  education,  they  should  also  control 
the  finances  entirely  ;  and  that  the  intelligence  of  the 
WHOLE  PEOPLE  is  greater  and  more  trustworthy  than  that 
of  a  few  bankers. 

These  persons  therefore  desire  •  First.  That  the  estab- 
lished standards  of  coinage  should  not  be  tampered  with  in 
the  interest  of  a  few,  either  by  raising  or  lowering  the 
weight  or  fineness  of  coins,  or  by  demonetizing  either  of 
the  precious  metals. 

Second.  That  the  issue  of  paper  money  should  be  taken 
entirely  away  from  the  banks,  and  be  so  regulated  in  amount 
as  to  produce  the  greatest  possible  stability  in  its  value. 

A  train  of  cars  can  gradually  run  up  and  down  a  chain  of 
mountains  with  safety,  while  an  abrupt  change  of  a  few  feet 
in  the  grade  would  produce  an  utter  wreck.  Business  can 
adjust  itself  to  new  conditions  with  little  industrial  disturb- 
ance, provided  the  changes  are  made  very  gradually.  As 
business  is  so  largely  dependent  on  the  capital  called 
money,  all  financial  changes  should  be  begun  only  after  the 
fullest  debate  and  the  widest  possible  publicity.  Even 
then,  they  should  be  proceeded  with  very  slowly  and  cau- 
19 


290 


SOCIAL  STRUGGLES. 


tiously.  As  large  bodies  move  much  more  slowly  than 
small  ones,  rash  changes  in  the  national  money  are  much 
less  liable  to  occur  by  the  act  of  the  whole  nation  than  by 
the  act  of  a  small  class.  The  demonetization  of  silver,  and 
several  other  bad  measures,  could  never  have  been  carried 
out  if  full  publicity  had  been  given  them. 

A  CONSERVATIVE   MEASURE. 

True  conservatism  bids  us  place  the  regulation  of  money 
in  what  experience  shows  is  the  safest  repository  of  all 
other  power:  /.  e.,  in  the  hands  of  the  people.  It  was 
formerly  imagined  unsafe  to  have  judges  elected  by  univer- 
sal suffrage  ;  but  extended  experience  has  shown  that  to  be 
the  safest  mode  of  securing  an  upright  and  able  judiciary. 
If  the  people  be  unfit  to  control  their  financial  affairs  they 
are  surely  unfit  to  control  their  religious  affairs,  and  we 
need  a  State  religion  controlled  by  a  few  men.  If  the  peo- 
ple should  not  assume  full  control  over  everything,  then  we 
should  logically  restrict  suffrage,  and  take  one  right  after 
another  from  them  until  we  reached  a  government  akin  to 
that  of  King  John  before  the  Barons  threatened  him  at 
Runnymede. 


CHAPTER  XI. 

Effect  of  Changes  in  the  Amount  of  Money.^ — What  a  Dollar  is. — Why 
Prices  fall  to  such  an  Extent  when  the  Coinage  is  Contracted. — 
How  we  state  the  V^alue  of  a  Dollar. — Effect  of  Habit  on  Ideas  of 
the  Value  of  a  Dollar. — ^DoUars  and  Bushels  are  Governed  alike. — 
How  Monopoly  can  Change  Prices. — ^JVlonopoly  -can  Change  the 
Value  of  a  Dollar. — Monopolies  in  California. — Money  Kings  wish 
to  Corner  Money. — Creditors  can  be  robbed  by  Inflating  the  Cur- 
rency.— History  of  Inflations. — Paper  Money  is  not  Helped  by  What 
is  "  back  of  it." — Inflation  is  possible  without  Issuing  Paper  Money. 
— Paper  Money  Inflation  a  Pretext  for  Crime. — Not  a  Fancy  Sketch. 
— Sudden  Changes  in  the  Currency  Paralyze  Business.— Why  Money 
is  hoarded  when  Prices  are  falling. — The  true  Test  of  the  Cheap- 
ness of  Money. — Difference  between  Temporary  Possession  of 
Money  and  Ownership  of  it. — A  Mistake  in  Diagnosis. — A  Typical 
Writer. — Lack  of  Confidence  ia  Prices  is  the  Reason  Men  hoard 
Money. — Effect  of  slow  Changes  in  the  Amount  of  Money. — What 
we  should  seek. 

TJie  chief  distinction  between  Wealth  and  Poverty  is  that 
rent  and  interest  are  paid  by  the  poor  and  received  by  the  rich. 
Contraction  of  the  amount  of  money  insidiously  increases  the 
tribute  paid  by  labor  to  capital. 

We  have  heretofore  found  that  ordinary  commercial 
transactions  are  carried  on  by  the  use  of  an  imaginary 
money, — the  money  of  account ;  the  terms  in  which  values 
are  compared,  computed  and  recorded.  We  have  also 
found  that  this  imaginary  money  has  a  variety  of  represen- 
tatives in  form  of  coins  and  paper  money.  Furthermore, 
we  have  learned  that  from  habit  and  experience,  the  resi- 
dents of  each  country  have  continually,  and  largely  uncon- 
sciously, in  mind  an  idea  of  the  value  of  the  unit  of  the 
money  of  account.  Having  this  in  mind,  they  readily  com- 
pare and  compute  values  without  direct  reference  to  the 
current  money,  the  particular  representative  of  the  money 
of  account,   which  may  chance  to  be  in  actual  use.     We 

291 


292 


SOCIAL  STRUGGLES. 


will  now  more  fully  inquire  how  the  value  of  this  unit  of 
the  money  of  account  first  becomes  established  in  the  pub- 
lic mind,  and  how  this  idea  of  value  may  be  changed  by 
influences  which  affect  the  current  money.  We  have  here- 
tofore seen  that  all  values  are  compared  and  computed  by 
a  numerical  method.  We  start  with  one  dollar,  one  pound, 
one  franc,  or  from  some  similar  standpoint ;  but  our  com- 
parisons are  always  with  the  unit,  ONE.  Once  having  in 
mind,  the  value  of  this  unit,  it  is  readily  multiplied  and 
divided,  and  thus  all  amounts  of  value  are  estimated  and 
stated.  Our  inquiry  therefore  is  complete,  when  we  find 
how  the  value  of  the  unit  of  all  moneys  of  account  is  first 
obtained,  and  how  this  idea  of  value  may  be  changed. 

WHAT   A   DOLLAR   IS. 

As  the  principle  is  the  same  in  all  moneys  of  account,  for 
convenience  we  will  confine  ourselves  to  a  study  of  the 
"dollar,"  how  we  first  get  an  idea  of  the  value  of  a  dollar 
and  how  this  idea  may  be  changed. 

A  dollar  is  an  unit  of  value.  Value  is  a  mental  concep- 
tion— a  judgment,  or  estimate,  of  the  relative  amount  of 
labor  or  sacrifice  which  a  given  thing  is  worth.  We  use 
the  term  "  dollars  "  in  stating  this  idea,  as  a  means  of  mak- 
ing ourselves  understood  by  others,  just  as  we  use  the  fig- 
ures I,  2,  3,  as  a  help  in  conveying  our  ideas  in  regard  to 
numbers.  A  given  number  of  "  dollars"  represents  an  idea 
of  value  similar  to  the  manner  that  certain  letters  represent 
an  idea  of  sound,  or  certain  figures  represent  an  idea  of 
quantity. 

Much  has  been  lately  said  about  "  8o-cent  dollars,"  "90- 
cent  dollars,"  etc.  This  is  merely  a  loose  way  of  stating 
loose  ideas.  The  cent  is  not  the  unit  of  value — it  is  sim- 
ply one  hundredth  part  of  a  dollar.  Therefore  every  "  dol- 
lar," no  matter  what  its  real  value,  contains  just  one  hun- 
dred cents. 

Money  derives  value  from  the  fact  that  its  use  is  not 
only  always  convenient,  but  almost  absolutely  necessary  to 
carry  on  the    extended  and    intricate  commerce  of  modern 


VALUE  OF  A  DOLLAR.  293 

times.  It  is  the  form  of  capital  by  whose  intervention  all 
other  kinds  of  capital  are  brought  in  relation  and  intercourse 
with  each  other.  It  is  the  medium  through  which  the 
association  of  labor  and  capital  is  chiefly  conducted. 

The  value  of  one  dollar  depends  on  its  relative  importance 
in  commercial  transactions  just  as  the  military  importance 
of  one  soldier  depends  on  his  relation  to  the  whole  force. 
One  soldier  is  of  considerable  consequence  in  a  squad  of 
ten  men  but  of  very  little  importance  as  one  of  an  army  of 
fifty  thousand.  In  one  case,  he  forms  ten  per  cent,  of  the 
whole  force  ;  in  the  other  case  he  is  only  one  fifty  thou- 
sandth part  of  the  army.  What  a  single  dollar  shall  be 
worth  is  determined  by  the  total  number  of  dollars  in  cir- 
culation. 

The  greater  the  number  of  dollars,  the  smaller  the  rela- 
tive importance  of  each  dollar.  The  relative  importance, 
and  therefore  the  value,  of  ONE  DOLLAR  is  governed  by  the 
same  law  that  governs  the  relative  importance  and  value  of 
any' other  ONE  thing.  The  dollar  is  the  unit  of  value  and 
the  worth  of  this  unit  depends  on  the  relation  whi^h  exists 
between  the  total  value  of  the  exchanges  daily  effected  by  its 
use,  and  the  total  number  of  these  units  in  circulation. 
For  example,  if  seven  hundred  millions  of  units  be  in  cir- 
culation in  a  country  like  Peru  or  Chili,  each  unit  will  have 
a  less  value  than  it  would  if  seven  hundred  million  of  units 
were  in  circulation  in  a  great,  rich  nation  like  the  United 
States.  If  a  hundred  million  units  be  in  circulation,  a  man 
with  a  million  dollars  has  one  per  cent,  of  the  money  in  the 
country  ;  increase  the  amount  of  circulation  to  a  thousand 
millions  and  a  man  with  a  million  will  then  have  one-tenth 
of  one  per  cent,  of  all  the  money,  and  his  ability  to  purchase 
property  will  be  correspondingly  decreased. 

When  Paris  was  surrounded  by  the  German  army,  the 
idea  of  value  previously  attached  to  each  barrel  of  meat 
and  flour  was  increased.  The  demand  for  food  was  sub- 
stantially unchanged,  but  the  number  of  barrels  of  food 
was  daily  growing  smaller.  Hence  each  barrel  steadily 
became  of  greater  relative   importance,  simply  because  the 


294 


SOCIAL  STRUGGLES. 


relation  between  the  number  of  barrels  and  the  demand 
therefor  was  steadily  changing.  The  total  number  of  bar- 
rels, therefore  determined  the  importance  and  value  of  one 
barrel. 

When  a  considerable  portion  of  the  grain  crop  of  a 
country  is  destroyed,  each  bushel  of  the  remainder  becomes 
more  valuable.  This  is  so,  for  precisely  the  same  reason 
that  each  dollar  remaining  in  a  country,  becomes  more  val- 
uable by  a  partial  destruction  of  the  dollars  in  that  country. 
In  one  case,  the  NUMBER  of  bushels  is  lessened.  In  the 
other  case,  the  NUMBER  of  dollars  is  lessened.  Each  remain- 
ing "  bushel  "  has  been  raised  in  value  because  the  NUM- 
BER of  those  bushels  has  been  diminished.  Each  remaining 
"dollar"  has  been  raised  in  value  because  the  NUMBER 
of  those  dollars  has  been  diminished. 

If  the  number  of  dollars  in  circulation  be  reduced  from 
one  hundred  millions  to  fifty  millions,  a  man  with  one 
million  dollars,  instead  of  having  one  per  cent,  of  all  the 
money  in  the  country  (as  he  would  have  when  a  hundred 
millions  were  in  circulation),  would  have  two  per  cent,  of  it. 
But  the  difference  between  one  and  two  per  cent,  would  not 
be  a  correct  index  of  the  amount  of  property  which  a  million 
dollars  would  then  buy. 

WHY    PRICES     FALL     TO     SUCH     AN     EXTENT   WHEN     THE 
CURRENCY   IS   CONTRACTED. 

The  value  of  all  the  money  in  a  country  is  always  only  a 
small  percentage  of  the  value  of  all  the  other  property  in 
that  country.  A  trifling  change  in  the  short  arm  of  a  steel- 
yard causes  a  considerable  movement  in  the  long  arm. 
Money  may,  therefore,  be  fitly  compared  to  the  short  arm 
of  a  steelyard,  and  all  other  property  to  the  long  arm.  A 
slight  change  in  the  amount  of  money  makes  a  very  decided 
change  in  the  amount  of  property  that  can  be  bought  with 
it.  In  1872,  the  premium  on  gold  in  this  country  was  about 
ten  per  cent.  Most  of  our  "  statesmen  "  and  "scientific 
financiers  "  thought  that  an  immediate  ten  per  cent,  con- 
traction of  the  currency  would  only  make  a  difference  of 


WffA  T  A  PRICE  IS. 


295 


ten  per  cent,  in  the  amount  of  property  which  a  given 
amount  of  dollars  would  buy  ;  but  events  showed  that  the 
fall  in  prices  was  far  more  than  that. 

HOW  WE  STATE  THE  VALUE  OF  A  DOLLAR. 

We  state  our  ideas  of  the  value  of  a  dollar  by  what  we 
call  "  prices."  That  is,  the  price  of  a  thing  is  our  idea  of 
its  relative  value  as  compared  with  a  dollar. 

When  there  are  one  hundred  millions  of  dollars  in  circula- 
tion, a  man  who  puts  a  price  of  one  hundred  dollars  on  his 
horse  thereby  really  (but  usually  unconsciously)  says  :  "  I 
will  sell  my  horse  for  one  millionth  part  of  the  money  in 
the  country."  Diminish  the  circulation  in  the  same  country 
to  ten  millions  of  dollars  and  it  would  then  require  an  enor- 
mously more  valuable  horse  than  in  the  aforesaid  supposed 
case,  to  bring  a  hundred  dollars,  as  that  sum  would  then 
be  one  hundred-thousandth  part  of  all  the  money  in  the 
country. 

The  average  scale  of  prices  in  a  country  represents  the 
average  judgment  of  the  community  in  regard  to  the 
relative  value  of  commodities  and  money,  just  as  the  above 
supposed  price  of  a  horse  does  that  of  its  owner.  These 
results  are  usually  reached  by  daily  and  insensible  changes 
in  the  judgment  of  individuals  with  regard  to  prices,  and 
not  by  a  conscious  analysis  of  the  subject. 

During  the  late  war  an  acquaintance  in  Alabama  sold  a 
little  steer  for  twenty-five  hundred  dollars.  The  price  was 
apparently  high,  but  not  so  in  reality.  It  was  merely  the 
judgment  of  both  seller  and  buyer  in  regard  to  the  relation 
Avhich  then  existed  between  the  value  of  the  steer  and  the 
fraction  of  all  the  money  in  the  Confederacy  which  twenty- 
five  hundred  represented.  The  money  of  the  Confederacy 
had  been  so  increased  in  amount  that  a  larger  number  of 
dollars  were  required  to  represent  the  proportion  which 
the  value  of  the  steer  bore  to  the  money.  Therefore, 
prices  are  the  estimate  of  mankind  of  the  relative  value  of 
one  thing  to  another,  as  compared  with  money.  The  term 
"price  "is  ordinarily  employed  to   denote  the  amount   of 


296 


SOCIAL  STRUGGLES. 


value  possessed  by  a  given  thing  expressed  in  terms  of 
money.  Thus,  when  we  say,  "  Wheat  is  worth  two  dollars  a 
bushel,"  two  dollars  is  the  "price"  of  a  bushel  of  wheat. 
But  while  we  constantly  use  language  in  such  way  as  to 
imply  that  the  value  of  the  thing  to  which  we  affix  ' '  a  price  " 
is  the  sole  fact  we  wish  to  determine,  in  reality,  we  put  a 
price  on  the  money  just  as  much  as  we  do  on  whatever  we 
"  price."  When  we  say  "  corn  is  worth  half  a  dollar  per 
bushel,"  we  virtually  say  that  the  price  of  a  dollar  is  two 
bushels  of  corn. 

The  average  scale  of  prices,  or,  what  is  called  the  "  mar- 
ket price,"  represents  the  average  judgment  of  the  commu- 
nity in  regard  to  this  relation.  This  dominant  opinion  is 
the  result  of  daily  interchange  of  thought  between  the 
various  members  of  society  and  of  the  incessant  bantering 
and  bargaining  between  sellers  and  buyers.  The  market 
prices  are  fixed,  and  change  in  men's  minds  without  their 
usually  being  conscious  of  the  sources  of  their  opinions. 

EFFECT   OF  HABIT   ON  IDEAS  OF  THE  VALUE   OF  A  DOLLAR, 

When  the  money  of  a  country  for  a  considerable  number 
of  years  has  remained  at  a  nearly  uniform  volume,  prices 
tend  to  become  established,  and  all  debts  and  contracts  are 
made  with  reference  to  the  prevailing  prices.  To  state  the 
same  fact  in  another  way,  by  long  habit  the  value  of  the 
dollar,  the  unit  of  the  money  of  account,  becomes  so  fixed 
in  the  public  mind  that  we  estimate  a  given  number  of 
"  dollars  "  with  little  reference  to  the  actual  thing  which 
represents  them.  After  this  idea  of  the  value  of  the  unit 
of  the  money  of  account  is  once  fixed  in  the  mind  of  a 
nation,  it  requires  a  considerable  time  and  striking  events 
to  dislodge  it.  However,  when  current  money  is  rapidly 
and  largely  increased  in  amount,  the  money  of  account 
slowly  but  finally  changes  to  meet  the  altered  condition. 
But  the  former  ideal  money  of  account  is  reinstated  in 
public  opinion  soon  after  the  accidental  conditions  which 
changed  it  are  removed. 

Thus    from    1789   to   1796,  the    currency  of   France  was 


CHANGES  IN  PRICES. 


297 


enormously  inflated  by  is'sues  of  paper  money.  These  issues 
were  so  large  in  amount  that  prices  rose  to  one,  two,  and 
three  hundred  times  their  original  sum.  Prices  rose  so 
rapidly  that  people's  ideas  of  value,  stated  in  money,  were 
mere  g-uesses.  It  seemed  as  if  the  money  of  account  had 
been  utterly  destroyed  by  this  carnival  of  folly.  But  after 
the  inflated  paper  money  had  all  been  wiped  out  by  repu- 
diation, it  was  seen  that  the  money  of  account  had  survived 
the  storm.  The  community  immediately  began  to  resume 
trade  with  the  old  money  of  account. 

A  similar  thing  occurred  in  the  Southern  States  during 
the  late  war.  When  a  pair  of  boots  cost  three  or  four  hun- 
dred dollars,  it  seemed  as  if  all  previous  ideas  of  the  value 
of  the  dollar  had  been  obliterated.  But  immediately  after 
the  close  of  the  war,  the  money  of  account  re-asserted  it- 
self. 

In  a  reverse  manner  from  that  aforesaid,  the  money  of 
account  may  be  changed  by  a  diminution  of  the  amount  of 
money  in  circulation.  This  has  been  going  on  for  over  ten 
years  in  Europe.  The  money  of  account  in  the  various 
nations  of  that  continent  had  been  slowly  formed  from  the 
average  public  judgment  of  values  predicated  on  the  use  of 
both  gold  and  silver  as  legal-tender  metals.  But  since  the 
demonetization  of  silver,  the  meaning  of  the  terms,  one 
franc,  one  mark,  etc.,  affixed  to  the  different  monetary  units, 
has  been  slowly  changing.  Hence  a  growing  change  in  the 
money  of  account.  But  the  ancient  money  of  account  will 
assert  itself  whenever  silver  is  restored  to  its  former  right- 
ful position,  and  the  necessary  increase  made  in  the 
amount  of  paper  money. 

DOLLARS  AND  BUSHELS  ARE  GOVERNED  ALIKE. 

A  widely  spread  feeling  exists  that  the  value  of  money 
changes  in  such  a  mysterious  way  that  no  one  can  either 
predict  what  effect  a  given  policy  will  produce,  or  explain 
events  after  they  have  occurred.  But  in  fact  the  value  of 
a  dollar,  no  matter  of  what  material  it  is  eomposed,  is  deter- 
mined by  precisely  the  same  principles  that  give  value  to 


298 


SOCIAL  STRUGGLES. 


a  bushel  of  wheat,  a  bushel  of  potatoes,  or  other  valuable 
things. 

The  value  of  a  bushel  of  wheat  depends  entirely  on  the 
conditions  in  which  it  is  placed.  Chief  of  these  conditions 
is  the  number  of  bushels  for  sale  at  a  free  market  price, 
relative  to  the  need  and  demand  for  those  bushels.  It  is 
not  the  number  of  bushels  in  existence  which  decides  the 
value  of  one  bushel ;  so  long  as  the  existing  wheat  can  be 
hoarded  and  kept  out  of  market,  for  the  time,  it  is  practi- 
cally destroyed. 

HOW  MONOPOLY   CAN   CHANGE   PRICES. 

The  great  speculative  operations  which  have  taken  place 
during  recent  years  in  wheat,  pork  and  other  commodities 
have  been  based  on  the  fact  that  whoever  can  control  and 
keep  from  market,  at  will,  a  sufificient  proportion  of  all,  or, 
a  very  considerable  part  of  a  given  thing,  which  exists  in 
the  world,  thereby  acquires,  to  a  large  extent,  the  power  to 
change  the  value  and  the  price  of  that  thing.  The  success 
of  such  an  operation  depends  chiefly  on  the  completeness 
with  which  a  given  thing  is  thus  monopolized,  the  length 
of  time  the  hold  can  be  maintained,  and  on  the  extent  to 
which  other  things  can  come  into  use  as  substitutes  for  the 
thing  withheld  from  market, 

MONOPOLY   CAN   CHANGE   THE  VALUE   OF  A   DOLLAR. 

The  value  of  "  one  dollar  "  depends  on  similar  facts  and 
similar  principles  to  those  which  give  value  to  bushels  of 
wheat  or  barrels  of  pork.  Othe-r  things  being  equal,  its 
value  is  increased  whenever  the  number  of  dollars  for  sale 
is  diminished ;  its  value  is  diminished  whenever  the  num- 
ber of  dollars  is  increased.  Combinations  can  be  made  to 
keep  dollars  from  sale,  just  as  combinations  can  be  made  to 
keep  wheat,  or  other  things  from  sale. 

Such  combinations  are  made  easier  and  more  likely  to 
succeed  by  the  same  causes  which  render  "  corners "  in 
other  things  more  easily  successful ;  viz.,  a  diminution  in 
the  number  of  dollars,  a  diminution  of  the    sources    from 


CORNERING  MONEY. 


299 


which    they  can    be    obtained,    and    a    diminution    of    the 
number  of  persons  who  possess  and  control  those  dollars. 

MONOPOLIES   IN   CALIFORNIA. 

Before  the  construction  of  the  Pacific  railroads,  Califor- 
nia was  isolated  from  the  sources  from  which  many  of  the 
necessaries  used  by  her  population  were  derived.  Con- 
sequently that  State  was  famous  for  creating  "  corners  "  in 
various  things.  One  man  would  buy  all  the  bacon  in  the 
State  and  contract  for  all  in  transit  thereto.  He  would 
then  advance  the  price  of  bacon  and  make  a  fortune  before 
the  people  could  obtain  supplies  from  another  source. 

Another  man  would  buy  all  the  sugar ;  another  would 
control  all  the  coffee,  and  another  would  buy  all  the  Spices 
in  the  State.  In  this  way  the  people  of  the  State  were 
plundered  by  monopolies  rendered  possible  by  the  condi- 
tions under  which  that  State  was  then  placed.  The  open- 
ing of  the  railroads  has  put  an  end  to  the  facility  of  these 
speculations.  New  supplies  can  more  readily  take  the 
place  of  those  withheld  from  market  by  speculators. 

MONEY   KINGS   WISH   TO    CORNER    MONEY. 

California  thus  affords  an  explanation  of  the  desire  of 
the  money  kings  of  the  world  to  limit  the  legal  tender 
which  the  people  must  use.  By  restricting  it  to  gold,  and 
by  placing  the  issue  of  paper  money  in  the  hands  of  a  few 
bankers,  it  is  made  far  easier  for  a  combination  of  rich  men 
to  make  a  "  corner "  in  dollars  whenever  they  choose. 
With  the  mints  open  freely  to  both  gold  and  silver,  and 
the  control  of  paper  money  taken  out  of  the  hands  of 
the  bankers,  the  people  would  then  be  as  much  safer  from 
an  injurious  hoarding  of  money,  compared  with  the  pres- 
ent, as  the  people  of  California  are  now  safer  than  for- 
merly from  the  hoarding  of  articles  of  food. 


300  SOCIAL  STRUGGLES. 

CREDITORS  CAN  BE  ROBBED  BY  INFLATING  THE  CURRENCY. 

Let  us  now  by  examples  show  some  of  the  practical  effects 
of  making  great  changes  in  the  amount  of  money  in  circula- 
tion. In  i860  A  buys  a  farm  in  Georgia  for  $10,000.  He 
pays  $2000  down,  and  gives  his  note  for  $8000,  secured 
by  mortgage  on  the  farm.  The  average  price  of  wheat 
for  several  years  has  been  $1.25  per  bushel.  The  price  of 
other  things  being  in  proportion  to  that  of  wheat.  Said 
mortgage,  therefore,  at  the  time  of  sale  of  the  farm,  re- 
presents the  value  of  6400  bushels  of  wheat.  War  breaks 
out  and  an  enormous  issue  of  paper  money  takes  place. 
The  price  of  wheat  rises  to  $25  per  bushel.  The  mort- 
gage then  represents  the  value  of  320  bushels  of  wheat. 
The  owner  of  the  farm  can  then  pay  the  mortgage  with  320 
bushels  of  wheat.  By  the  trick  of  inflating  the  currency, 
the  seller  of  the  farm  has  been  robbed  of  the  value  of  6080 
bushels  of  wheat. 

HISTORY   OF   INFLATIONS. 

The  history  of  all  unlimited  issues  of  paper  money  is  sim- 
ilar to  the  story  told  in  the  foregoing  example  :  viz.,  an 
enormous  rise  in  prices  ;  robbery  of  creditors  and  derange- 
ment of  industry.  The  history  of  our  Continental  currency 
during  the  Revolutionary  War  with  England  is  substantially 
a  history  of  all  excessive  issues  of  paper  money.  It  re- 
mained at  par  with  coin,  until  about  nine  million  dollars  had 
been  put  in  circulation  ;  it  then  gradually  depreciated  with 
the  issue  of  each  successive  and  additional  million  until  it 
finally  became  almost  worthless.  The  unsuccessful  attempts 
to  use  a  public  debt  as  currency  all  owe  their  failure  to  one 
cause,  viz.:  TJie  amount  of  debt  put  in  circulation  as  money 
was  not  limited  to  the  actual  needs  of  trade,  on  the  basis  of  the 
existing  scale  of  prices. 

The  trade  of  a  given  nation,  or  community,  daily  trans- 
fers from  one  person  to  another  a  certain  amount  of  labor 
and  coijimodities.  This  transfer  is  more  conveniently  ac- 
complished by  the  use  of  a  certain  volume  of  value  in  the 


VALUE  OF  PAPER  MONEY. 


301 


form  which  we  call  "money."  No  matter  of  zvhat  material 
this  money  be  composed, — no  matter  whether  it  be  convertible 
into  coin  or  not,  so  long  as  its  volume  does  not  exceed  the  quan- 
tity requisite  for  the  convenioit  exchange  of  this  value,  it 
loill  perform  all  its  functions  without  depreciation. 

PAPER  MONEY  IS  NOT   HELPED  BY  WHAT   IS   "  BACK  OF  IT." 

The  idea  that  paper  money  derives  its  value  from  what 
there  is  "  back  of  it  "  is  a  mistake.  Paper  money  does  not 
need  anything  "  back  of  it"  any  more  than  a  half  bushel 
measure  needs  something  back  of  it.  It  simply  needs  to 
be  Hmited  to  the  amount  needed  to  carry  on  business. 
Further  than  that,  "  something  back  of  it  "  is  of  no  effect 
whatever.  It  makes  no  difference  what  guarantees  of  its 
payment  may  exist,  nor  how  much  wealth  may  be  pledged 
behind  it,  whenever  more  money  is  permanently  put  in  cir- 
culation than  is  requisite  to  conveniently  effect  the  ex- 
changes of  a  certain  locality,  such  money  begins  to  depre- 
ciate ; — it  generally  remains  nominally  at  par,  its  decline  in 
value  being  shown  by  the  rise  in  the  price  of  commodities 
stated  in  such  money. 

The  idea  that  an  unlimited  issue  of  paper  money  can  be 
safely  made,  if  an  equal  or  greater  amount  of  property  be 
pledged  for  its  payment,  is  essentially  the  error  which  led 
France  to  issue  assignats  during  the  French  Revolution. 

This  notion  has  arisen  from  the  idea  that  paper  money  is 
good  only  when  it  is  "  redeemed  "  in  coin.  Redemption  of 
paper  money  in  coin  adds  to  its  value  only  so  far  as  it  limits 
its  Amount.  Aside  from  that  one  purpose,  it  is  as  useless  to 
"redeem"  a  paper  dollar  as  it  would  be  to  redeem  a  gold 
dollar  ;  or  to  "  redeem  "  a  peck  measure,  or  a  yardstick. 
The  efificiency  of  all  schemes  for  the  so-called  "  redemption  ", 
of  paper  money  is  determined  solely  by  the  degree  in  which 
they  maintain  a  uniform  relative  amount  of  paper  money  in 
circulation. 

It  has  been  asked  :  If  unlimited  paper  money  produce 
such  disasters,  is  not  paper  money  more  dangerous  than 
metallic  money?     Yes;  for  the  same  reason  that  a  locomo- 


,02  SOCIAL  STRUGGLES. 

tive  engine,  unless  in  intelligent  hands,  is  more  dangerous 
than  an  ox  team.  The  more  powerful  and  efficient  the 
agent,  the  more  need  of  careful  management.  An  ''  unlim- 
ited "  horse  runs  away  and  does  damage  to  the  carriage  and 
its  occupants.  "  Unlimited  "  fire  burns  cities  ;  "unlimited" 
steam  explodes  boilers  ;  gunpowder  will  ignite  and  tear  us  in 
pieces — in  fact,  every  useful  agent  or  power  is  only  useful 
when  intelligently  used.  If  we  cease  to  employ  things  be- 
cause, if  not  regulated,  they  would  inflict  injury,  we  should 
at  once  discard  steam,  electricity,  fire,  water,  and,  in  short, 
almost  everything  which  helps  to  make  civilization.  We 
should  return  to  primitive  barbarism. 

INFLATION   IS   POSSIBLE   WITHOUT   ISSUING  PAPER  MONEY. 

Furthermore,  there  is  nothing  in  the  Constitution  which 
prevents  Congress  from  enormously  inflating  our  gold  and 
silver  coins.  It  could  be  done  by  enacting  a  law  that  a  ten- 
dollar  gold  piece  should  contain  only  fifty  grains  of  stand- 
ard gold  instead  of  two  hundred  and  fifty-eight  grains  as  at 
present.  This  always  must  be  so,  because  the  power  to  de- 
clare what  shall  be  a  legal  tender  is  an  attribute  of  sover- 
eignty, and  must  be  lodged  with  the  national  legislature.  It 
cannot  be  destroyed  without  destruction  of  the  independ- 
ence and  sovereign  power  of  the  nation. 

Inflation  to-day  is  not  prevented  by  law,  nor  by  the  use 
of  metallic  currency,  but  by  the  people  having  been  edu- 
cated to  abhor  a  change  in  the  currency  which  robs  one 
■class  for  the  benefit  of  another.  Public  intelligence  and 
publicity  of  all  proposed  changes  in  the  volume  of  mOney 
are  the  best  safeguards  against  inflation. 

PAPER   MONEY    INFLATION   A   PRETEXT   FOR    CRIME. 

The  fact  that  unlimited  issues  of  paper  money  have  in- 
flicted injuries  on  society  in  the  past,  has  been  used  as  a 
pretext  to  justify  crimes  on  the  community  in  a  direction 
the  opposite  of  inflation.  A  sketch  of  the  practical  opera- 
tion of  one  of  these  acts  on  a  single  individual  will  illus- 
trate their  effect  on  a  large  portion  of  the  community. 


ROBBERY  OF  DEBTORS. 


303 


In  1872,  B  buys  a  farm  in  Pennsylvania  for  $10,000.  In 
payment,  he  gives  $2500  in  cash  and  his  note  for  $7500, 
secured  by  mortgage  on  the  farm.  Wheat  in  that  vicinity 
has  for  several  years  been  worth  an  average  of  $1.50  per 
bushel.  The  price  of  other  articles  in  proportion  to  that 
of  wheat.  The  debt  of  B  t^ius  represents  5000  bushels  of 
wheat,  or  a  proportional  amount  of  other  produce. 

In  1873  silver  was  demonetized.  There  was  no  petition 
for  such  an  act,  either  by  the  people  or  by  representative 
bodies.  The  voters  never  assented  to  it — it  was  never 
made  a  portion  of  a  political  platform.  The  whole  affair 
was  managed  so  quietly  that  very  few  persons  knew  anything 
about  it  until  months  after  it  had  been  done.  It  was  not 
generally  known  until  public  distress  led  to  inquiries  as  to 
the  cause  of  hard  times. 

The  currency  is  thus  contracted  and  prices  fall.  Gold  is 
the  sole  metallic  legal  tender,  and  the  demand  therefor  and 
its  value  are  thereby  increased.  Taxes  and  interest  are  un- 
changed but  the  price  of  wheat  goes  steadily  down  from 
year  to  year  until  it  reaches  ninety  cents  a  bushel. 

When  B  first  got  his  farm  he  could  pay  the  yearly  in- 
terest on  his  debt  with  300  bushels  of  wheat.  It  now  re- 
quires 500  bushels  to  pay  the  interest.  The  whole  debt 
could  originally  be  paid  with  5000  bushels  of  wheat, — but 
now  it  would  require  about  8383  bushels  of  wheat  to  pay  it. 
Other  produce  has  fallen  in  price  as  much  as  wheat,  and  B 
finds  himself  unable  to  pay  the  interest  on  the  mortgage. 

B  then  tries  to  sell  his  farm,  but  finds  that  land  has  fallen 
in  price  so  that  no  one  is  willing  to  pay  the  mortgage  for 
the  farm.  B  then  goes  to  his  creditor  and  offers  to  return 
the  farm  in  payment  of  his  debt,  thus  sinking  the  $2500 
paid  down.  But  the  creditor  refuses  to  accede  to  B's  re- 
quest. Finally  the  creditor  forecloses  the  mortgage,  gets 
back  the  farm,  and,  from  an  action  on  B's  note,  takes  all  his 
cattle  and  farming  utensils  which  the  lavv^  will  allow  him. 
Thus,  B  has  lost  several  years'  labor,  many  valuable  im- 
provements made  on  the  farm,  the  $2500  and  most  of  his 
cattle  and  tools. 


304 


SOCIAL  STRUGGLES. 


While  this  cheerful  process  has  been  going  on,  B  has  read 
in  his  newspaper  that  the  hard  times  were  caused  by  the 
Suez  Canal,  the  Bankruptcy  Act  and  over  production  : — that 
we  have  grown  so  rich  as  to  make  hard  times,  and  that  a 
few  rascals  wanted  to  have  silver  coined. 

NOT   A   FANCY    SKETCH. 

That  the  foregoing  example  is  not  a  mere  fancy  sketch 
many  thousands  of  persons  know  from  bitter  experience. 
A  vast  number  of  persons  have  been  reduced  to  poverty. 
Another  multitude  have  spent  the  best  years  of  their  lives 
in  industry  and  economy,  without  being  able  to  pay  any- 
thing more  on  the  mortgages  on  their  homes  than  the  in- 
creased burden  of  interest  thrown  upon  them  by  contraction 
of  the  currency. 

SUDDEN   CHANGES  IN  THE  CURRENCY  PARALYZE   BUSINESS. 

When  the  currency  is  undergoing  either  rapid  and  great 
inflation,  or  is  undergoing  rapid  contraction,  industry  is  par- 
alyzed. The  principle  which  produces  this  industrial  pros- 
tration is  identical  in  both  said  cases  ;  viz.,  the  capital,  called 
money,  whose  function  is  to  associate  capital  and  labor,  is 
deranged.     The  distribution  of  wealth  is  retarded. 

But  the  immediate  source  of  trouble  is  precisely  opposite 
in  one  case  from  the  other.  When  inflation  is  going  on  so 
that  no  one  knows  if  he  sells  goods  to-day  how  much  he  will 
have  to  pay  to  replace  them  to-morrow,— people  hoard  their 
goods.  When  contraction  is  going  on  so  that  no  one  knows 
if  he  buys  goods  to-day  whether  they  will  not  be  lower  priced 
to-morrow,  people  hoard  their  money. 

For  the  past  few  years,  money  has  been  hoarded  simply 
because  it  was  increasing  in  value.  When  prices  are  stead- 
ily falling,  holders  of  money  prefer  to  either  hoard  it,  or 
loan  it  on  call  with  ample  security.  This  has  led  to  the  ac- 
cumulation of  large  sums  of  money  in  our  financial  centers, 
and  to  its  being  loaned,  on  call,  at  one  or  two  per  cent,  per 
annum.     Thereupon  it  has  been  said  :  "  While  business  is 


IVHA  T  CHEAP  MONE  V  IS. 


305 


depressed  and   prices  low,  there  is  an  abundant  supply  of 
cheap  money." 

WHY   MONEY   IS   HOARDED   WHEN    PRICES   ARE   FALLING. 

The  aforesaid  talk  about  "cheap  money"  is  a  stumbling 
block  over  which  many  fall.  But  it  is  really  a  very  simple 
matter.  The  fact  that  money  can  be  borrowed  at  two  per 
cent,  per  annum  is  no  evidence  whatever  of  the  actual  value 
of  that  money.  The  lender  of  money,  on  call,  does  not  part 
with  the  ownership  of  the  money, — he  has  not  so/d  his 
money.  He  has  merely  sold  the  temporary  possession  of  hjs 
money,  and  has  taken  what  he  deems  ample  security  that 
the  possession  of  the  money  shall  be  given  back  "  on  call." 

THE   TRUE   TEST   OF   THE    CHEAPNESS   OF    MONEY. 

In  order  to  ascertain  whether  money  is  "  cheap,"  as  al- 
leged, the  proper  way  is  to  go  into  the  market  and  endeavor 
to  buy  money : — that  is,  try  to  exchange  other  property  for 
money.  The  same  persons  who  tell  us  money  is  "cheap," 
say  that  prices  are  low.  This  cannot  be.  When  two  dif- 
ferent things  are  put  in  the  opposite  sides  of  evenly  bal- 
anced scales,  one  side  or  the  other  must  go  down.  One  side 
is  down  and  the  other  up.  One  side  is  low  and  the  other 
high.  When  prices  are  down,  money  is  up.  When  prices 
are  up,  money  is  down.  Money  is  actually  "  cheap  "  when 
it  is  on  sale  at  low  prices — that  is,  ivhen  its  absolute  oivner- 
sJiip  can  be  bought  for  a  comparatively  moderate  amount  of 
property  or  labor.  In  such  case  what  we  call  "  prices  "  are 
high. 

DIFFERENCE  BETWEEN   TEMPORARY  POSSESSION  OF  MONEY 
AND    OWNERSHIP   OF   IT. 

The  owners  of  money,  when  the  currency  is  contracting, 
are  in  the  condition  of  the  owner  of  a  vacant  lot  in  the  cen- 
ter of  a  rapidly  growing  town.  The  value  of  such  a  lot  is 
steadily  rising.  Its  owner  cares  little' who  may  have  the 
temporary  occupation  of  it  so  long  as  its  ownership  re- 
mains   in    his    hands.     He  may  be  willing  to   lease  it  for 


20 


2o6  SOCIAL  STRUGGLES. 

three  or  five  years  at  a  very  low  rent,  but  this  low  rent 
does  not  prove  that  the  lot  is  "  cheap."  It  merely  shows 
that  its  owner  is  so  convinced  that  it  will  be  worth  more  in 
the  future  than  at  present,  that  he  prefers  to  temporarily 
dispose  of  its  possession  instead  of  at  once  selling  its  owner- 
ship. 

Whenever  the  owners  of  money  think  it  will  be  worth 
less  in  the  future  than  at  present,  they  make  haste  to  sell 
their  money ;  that  is,  as  far  as  they  can,  they  exchange  it 
for  other  property  which  they  think  will  rise  in  price.  It 
has  constantly  been  said  that  the  large  amount  of  idle 
money  in  New  York  was  due  to  "  fear  of  inflation."  If  such 
a  fear  actually  existed,  the  owners  of  that  money  would  im- 
mediately seek  to  protect  themselves  by  investing  in  prop- 
erty less  liable  to  be  harmed  by  inflation  than  money. 

The  aforesaid  considerations  show  that  the  hoarding  of  a 
large  amount  of  idle  money  in  New  York  and  other  finan- 
cial centers  is  a  symptom  that  money  is  dear  and  steadily 
growing  dearer.  Some  of  the  owners  of  the  capital  called 
money,  which  should  be  employed  in  associating  other  cap- 
ita*! with  labor,  and  distributing  the  products,  are  lying  in 
wait  to  see  how  much  of  previously  created  wealth  they 
can  obtain  for  their  money.  This  conduct  withdraws 
money  from  circulation  just  as  effectually,  for  the  time  it  is 
hoarded,  as  if  it  were  destroyed.  The  contraction  going  on 
from  other  causes  is  thus  intensified. 

If  our  currency  were  still  more  contracted,  it  would  ap- 
pear more  abundant  and  cheaper  to  the  superficial  ob- 
server than  at  present.  Money  would  be  rising  in  value 
faster  than  it  now  is.  More  money  would  then  be  lying 
idle,  and  the  rate  of  interest  on  call  loans  would  be  lower 
than  at  present.  When  the  purchasing  power,  and  there- 
fore the  actual  value  of  money  is  increasing  at  the  rate  of 
ten  per  cent,  per  annum,  whoever  borrows  money  to  be  re- 
paid one  year  thereafter,  must  return  to  the  creditor,  not 
only  whatever  interest  he  agreed  to  pay,  but  a  principal 
more  valuable  by  ten  per  cent,  than  was  originally  bor- 
rowed.    Consequently,  if  the  currency  is  being  contracted 


HOW  BANKRUPTS  ARE  MADE. 


30; 


enough,  no  one  expecting  to  repay  it  would  borrow  money, 
even  without  any  interest  whatever.  This  would  be  so,  be- 
cause the  rise  in  the  value  of  the  money  would  be  more 
than  the  borrower  could  reasonably  expect  to  make  as 
profits  out  of  the  business  in  which  the  borrowed  money 
was  used. 

A   MISTAKE   IN   DIAGNOSIS. 

The  phenomena  which  are  indicative  of  a  contracted  cur- 
rency, have  been  mistaken  by  those  who  "profess"  a  sci- 
entific knowledge  of  money  for  evidence  of  inflation. 
These  persons  and  their  followers  have  increased  their 
clamor  for  further  contraction  just  in  proportion  as  the 
trade  centers  have  become  congested,  the  interest  on  call 
loans  lower,  and  business  and  prices  more  depressed. 

When  medical  men  were  more  ignorant  than  at  present, 
many  diseases  characterized  by  a  full,  bounding  and  rapid 
pulse  were  supposed  to  arise  "  from  the  patient  having  too 
much  strength  and  too  much  blood."  On  this  theory, 
bleeding  was  the  proper  remedy.  In  this  way,  vast  num- 
bers of  persons  have  been  brought  at  once  "  down  to  hard 
pan "  beneath  the  sod.  Physicians  have  slowly  learned 
that  such  patients  have  neither  too  much  strength  nor  too 
much  blood.  The  circulating  medium  is  unbalanced  ,  and 
instead  of  opening  veins  and  letting  it  out,  they  now  take 
measures  to  restore  its  normal  equilibrium  and  functions. 

In  like  manner,  financial  doctors,  ignorant  of  the  facts 
and  principles  involved,  have  mistaken  the  congestion  of 
the  circulating  medium,  produced  by  contraction,  for  symp- 
toms of  too  much  money  and  toa  much  wealth.  In  their 
minds,  low  prices  and  a  great  derangement  and  depres- 
sion of  industry  indicate  "  inflation  and  overproduction." 
There  is  no  doubt  that  inflation  can  produce  great  pros- 
tration of  commerce  and  industry.  But  this  derangement 
of  business  is  always,  and  necessarily,  accompanied  with 
abnormally  high  prices.  Whereas  the  paralysis  caused  by 
contraction  is  always  attended  with  low  prices. 

Since  contraction  has  been  going  on  in  this  country  it  has 


308 


SOCIAL  STRUGGLES. 


been  repeatedly  stated  that  multitudes  of  persons  were 
made  bankrupt  because  fear  of  inflation  made  capitalists 
refuse  to  help  debtors  with  loans.  Most  bankrupts  became 
such,  not  because  they  could  not  borrow  more,  but  because 
they  had  already  borrowed  too  much.  They  did  not  need 
more  "  borrowed  money," — they  needed  more  money  of 
their  own.  They  needed  to  be  able  to  sell  their  goods,  or 
their  property,  at  a  fair  price;  inability  to  do  that,  caused 
their  failure.  They  were  forced  to  exchange  their  goods 
for  money  dearer  than  the  money  with  which  those  goods 
were  bought. 

A   TYPICAL  WRITER. 

As  a  specimen  of  the  prevalent  ignorance  on  this  topic, 
the  following  quotation  is  made  from  the  Christian  Uition 
of  Feb.  4,  1886.  The  Union  is  one  of  the  so-called  relig- 
ious papers  which  steadily  advocates  the  dominant  ideas  of 
Wall  Street. 

"  The  gradual  approach  of  Congress  to  the  discussion  of  the  sih'er 
question  is  felt  and  expressed  in  the  reluctance  of  business  men  and  cap- 
italists to  enter  into  any  new  or  larger  enterprises  until  the  policy  of  the 
Government  with  respect  to  silver  has  become  settled.  The  various  pro- 
jects offered  in  Congress  illustrate  the  feeling  that  something  must  be 
done,  if  possible,  to  ease  the  burden  which  the  radical  silver  men  insist 
shall  continue  to  be  borne ;  i.  e.,  a  continuance  of  coinage  of  standard 
silver  dollars.  It  is  hoped  that  among  these  projects  something  will  be 
found  that  can  lighten  the  great  cloud  which  otherwise  will  continue  to 
overshadow  the  country.  Confidence,  it  would  seem,  is  ready  to  assert 
itself,  but  the  utter  doubt  as  to  the  issue  of  the  growing  agitation  of  the 
silver  coinage  question  acts  as  a  paralysis  and  holds  all  of  our  wealth- 
producing  sources  in  absolute  check.  For  this  reason  we  find  our  banks 
again  accumulating  idle  capital.  At  the  close  of  last  week  there  was  a 
surplus  reserve  of  over  $35,000,000  in  the  New  York  City  banks,  repre- 
senting just  so  much  distrust  or  doubt.  This  idle  reserve  is  growing 
from  week  to  week  so  that  the  money  market  rules  about  one  and  a  half 
per  cent,  for  money  on  call  at  the  Exchange." 

The  editor  of  the  Union  seeks  to  persuade  his  readers 
that  the  amount  of  idle  money  constantly  increases  because 
its  owners  believe  the  coinage  of  silver  dollars  will  not  be 


1 


THE  ACTUAL  BELIEF.  oqq 

stopped.  He  says;  "Confidence  is  ready  to  assert  itself." 
We  ask :  Confidence  in  what  ?  What  feehng  is  it  that  in- 
duces men  to  prefer  lending  money  at  one  and  a  half  per 
cent,  on  call  instead  of  investing  it  in  business  enterprises? 

The  moment  we  drop  visionary  theories  and  use  our  com- 
mon sense,  the  answer  to  the  above  questions  is  obvious. 
The  owners  of  the  aforesaid  idle  money  are  guided  by  the 
same  principles  which  influence  the  majority  of  other 
property  owners.  That  is,  they  use  their  property  in  the 
way  which  they  think  will  yield  the  greatest  profit.  Their 
conduct  shows  that  they  think  it  more  profitable  to  keep 
their  money  under  constant  control  than  it  would  be 
to  invest  it  in  real  estate,  buildings,  machinery,  com- 
modities, or  any  other  form  of  wealth.  So  much,  no  one 
will  deny. 

The  next  question  is :  Why  do  they  think  as  they  evi- 
dently do  ?  The  Union  imagines  the  owners  of  this  idle 
money  do  not  invest  it  in  productive  industry  because  they 
fear  silver  will  continue  to  be  coined,  and  the  prices  of  ma- 
chinery, buildings  and  goods  consequently  rise.  Just  think 
of  this  proposition  one  minute.  Do  men  refuse  to  invest 
in  things  which  they  think  will  soon  command  a  higher 
price  ?  Is  it  not  perfectly  certain  that,  like  all  other  per- 
sons, the  owners  of  this  idle  money  are  ready  to  make  a 
profit  ?  Is  it  not  also  certain,  that  these  men  would  at 
once  invest  in  productive  business,  if  they  expected  a  rise 
in  the  price  of  the  property  in  which  their  money  would  be 
invested  in  such  case? 

LACK     OF     CONFIDENCE    IN    PRICES    IS    THE    REASON    MEN 
HOARD    MONEY. 

The  editor  of  the  Union  would  be  right,  if  he  completely 
reversed  his  ideas.  Wealth  is  kept  in  form  of  money  for 
the  simple  reason  that  there  is  want  of  confidence  in  the 
stability  of  prices.  ,  There  is  fear  that  prices  will  go  still 
lower.  There  is  a  belief  that  money  will  rise  in  value  and 
all  other  property  fall  in  price.  Whenever  it  is  perfectly 
certain  that  the  coinage  of  silver  will  be  permanently  con- 


3IO 


SOCIAL  STRUGGLES. 


tinued,  and  the  coined  silver  put  in  circulation  by  paper 
certificates,  the  owners  of  money  will  be  guided  by  the 
same  principles  they  are  now.  They  will  invest  their  prop- 
erty where  it  will  bring  the  most  profit ,  viz.,  they  will 
change  it  from  money  into  something  they  think  will  pro- 
duce more  income.  Hoards  of  idle  money  will  be  replaced 
by  money  in  active  circulation,  prices  will  rise  and  "  better 
times  "  will  appear. 

EFFECT   OF   SLOW   CHANGES   IN   THE  AMOUNT  OF   MONEY. 

The  foregoing  are  the  chief  symptoms  when  either  infla- 
tion or  contraction  occurs  rapidly  enough  to  be  perceptible. 
But  inflation  and  contraction  of  the  currency  often  take 
place  so  slowly  as  to  be  imperceptible  except  by  comparing 
prices  separated  by  long  periods  of  time.  In  the  end, 
prices  reach  the  same  point,  no  matter  whether  the  change 
in  the  amount  of  money  be  very  slow  or  comparatively 
rapid.  But  the  effects  of  the  change.of  price  are  modified 
by  the  fact  that,  in  such  case,  other  conditions  can  partially 
adjust  themselves  to  the  change. 

A  rapid  inflation  of  the  money  of  a  country  is  nearly  as 
disastrous  to  the  interests  of  that  country  as  a  rapid  con- 
traction of  it.  But  when  the  increase  in  the  amount  of 
money  takes  place  very  slowly,  many  good  results  flow 
therefrom. 

In  society,  organized  as  it  mostly  has  been  on  the  prin- 
ciple that  each  man  should  engage  in  competition  for  what- 
ever wealth  he  can  get,  with  comparatively  little  legal  reg- 
ulation of  this  struggle,  the  inevitable  tendency  is  for 
wealth  to  accumulate  in  few  hands.  Some  men  have 
greater  capacity  than  others  to  fairly  get  wealth.  When 
this  capability  is  united,  as  it  frequently  is,  with  cunning 
and  unscrupulousness,  the  probabilities  are  greatly  that 
such  a  person  will  obtain  more  wealth  than  is  best  for  the 
rest  of  the  community;  at  least,  such  is  the  tendency.  A 
diminution  in  the  amount  of  money  intensifies  this  ten- 
dency, because  the  value  of  loans,  when  they  fall  due,  is 
constantly  greater  than  when  the  debt  was  incurred. 


A  SLOW  RISE  OF  PRICES. 


311 


For  example,  a  family  with  a  hundred  thousand  dollars 
invested  at  six  per  cent,  in  1809  could  spend  six  thousand 
dollars  every  year,  and  find  themselves  in  1849  i"  possession 
of  property  as  valuable  as  two  hundred  and  forty-five  thou- 
sand dollars  were  in  1809.  This  would  be  their  reward  for 
keeping  out  of  business.  If,  during  that  time,  there  had 
been  a  gradual  increase  in  the  amount  of  money,  and  a  con- 
sequent fall  in  its  value,  this  family  would  find  their  income 
gradually  diminished  in  purchasing  power ;  they  would  see 
their  industrious  neighbors  growing  richer  while  they  grew 
poorer,  and  this  would  impel  them  to  educate  their  sons 
and  daughters  to  habits  of  industry  irtstead  of  lives  of 
fashionable  idleness.  A  slow  rise  in  prices  by  increasing 
the  reward  of  labor,  and  thus  stimulating  productive  indus- 
try, tends  to  increase  the  wealth  of  a  nation.  It  tends  to 
keep  men  from  retiring  from  business  as  soon  as  they  would 
if  they  could  convert  their  property  into  money,  loan  it, 
and  feel  that  they  were  not  only  receiving  interest  thereon, 
but  that  the  principal  was  growing  more  valuable.  This 
retains  valuable  ability  longer  in  the  service  of  society,  and 
prevents  enterprises  from  falling  into  inexperienced  hands, 
thus  wasting  both  capital  and  labor.  It  is  also  a  great  in- 
centive to  industry  on  the  part  of  young  men — it  makes  it 
easier  for  them  to  rise  from  poverty  to  positions  of  wealth 
and  honor. 

It  is  sound  public  policy  to  have  the  wealth  of  the  nation 
in  many  hands  ;  to  have  the  masses  contented  and  inter- 
ested in  the  preservation  of  order  and  in  whatever  measures 
tend  to  advance  the  common  interests.  If  the  friends  of 
the  English  financial  system  succeed  in  their  plans,  the 
amount  of  money  will  slowly  diminish,  because  the  demon- 
etization of  silver  will  extend  from  one  nation  to  another, 
until  gold,  except  for  small  change,  will  be  the  sole  legal 
tender  throughout  the  world.  This  would  tend  to  give  an 
unfair  advantage  to  capital,  in  the  form  of  money,  and  to 
place  the  wealth  of  the  world  for  the  most  part  in  compara- 
tively few^  hands. 

Whenever  a  large  number  of  persons  are  poor,  and  with- 


312 


SOCIAL  STRUGGLES. 


out  hope  of  anything  better,  they  have  little  interest  in  the 
public  welfare,  and  easily  become  dangerous  to  society. 
Such  persons  feel,  that  no  matter  what  occurs,  tJiey  have 
little  to  lose. 

WHAT   WE   SHOULD   SEEK. 

The  ideal  condition  is  to  have  the  value  of  money  uniform 
from  generation  to  generation,  and  the  covetousness  of  able 
men  placed  under  wholesome  legal  restraints.  The  inter- 
ests of  the  landlord  and  tenant,  and  of  the  lender  and  the 
borrower  are  not  identical.  The  constant  tendency  of 
human  selfishness  is  therefore  to  make  RENT  AND  INTEREST 
the  two  chief  forms  by  which  capital  lays  labor  under  tribute, 
higher  than  absolute  justice  would  sanction.  The  creation 
of  a  stable  currency  would  be  a  long  step  toward  an  equi- 
table regulation  of  rent  and  interest. 

Uniformity  in  the  value  of  money  can  only  be  obtained 
by  making  the  dominant  condition  which  gives  value  to 
money  uniform.  The  NUMBERS  of  the  unit  of  money, 
RELATIVE  to  the  numbers  of  the  units  of  all  other  valuable 
things,  must  be  uniform.  That  is,  an  increased  or  a  dimin- 
ished production  and  exchange  of  wealth  should  be  simul- 
taneously accompanied  with  an  increased  or  diminished  pro- 
duction of  the  units  of  money.  The  numbers  of  "  dollars" 
should  perfectly  reflect  the  aggregate  numbers  of  all  other 
commercial  things.  The  production  of  money  should  keep 
even  pace  with  the  creation  of  all  other  products  of  labor. 


CHAPTER  XII, 

Alleged  Causes  of  Hard  Times :  The  Real  Causes  are  not  usually 
Assigned. — Actions  are  more  Trustworthy  than  Words. — No  Lack 
of  Confidence  in  Silver  Dollars. — The  Confidence  Cry. — The  Bank- 
rupt Law  did  not  make  Hard  Times. — Overproduction. — What 
Production  is. — Tendency  of  Poverty. — Tramps. — Capacity  to  La- 
bor is  a  form  of  Property. The  Farmers  and  Overproduction.^Who 

are  Benefited  by  Falling  Prices. — London  and  New  York  are  the 
Chief  Authors  of  the  Cry  "  Overproduction." — A  Temporary  Cure 
of  "  Overproduction." — Great  Changes  in  the  Amount  of  Money  in 
Circulation  Destroy  Wealth. — When  a  Thing  has  the  Greatest 
Value. — What  each  Person  should  Possess. — Examples  of  Destruc- 
tion of  Value. — Report  of  an  Embassy  from  China. 

No  matter  hoiu'  iniicJi  distress  among  the  laboring  classes 
is  caused  by  bad  financial  legislation,  they  seldom  complain 
of  fluetiiating  money  ;  the  actual  source  of  their  misfortune  is 
not  usually  recognised. 

During  the  years  of  business  depression  which  have  oc- 
curred since  1872,  various  things  have  been  assigned  as 
causes  thereof.  Some  of  these  allegations,  in  all  probabihty, 
were  originally  put  in  circulation  by  persons  who  knew 
better,  for  the  express  purpose  of  diverting  the  attention  of 
the  public  from  the  real  source  of  their  troubles.  But  as 
they  have  been  generally  believed,  some  examination  of 
them  should  be  made. 

The  first  allegation  was  •  "  The  greenbacks  make  all  the 
trouble.  There  is  no  confidence  in  the  greenback.  De- 
stroy the  greenbacks  and  the  hard  times  will  be  over." 

Human  nature  is  unchanged.  If  men  feared  inflation, 
they  would  act  as  history  shows  us  men  have  always  acted 
whenever  they  lost  confidence  in  the  value  of  their  money. 
They  would  at  once  seek  to  exchange  the  suspected  money 
for  something  which  they  thought  had  more  permanent 
value  than  the  money  itself.  They  would  not  eagerly  seek 
possession  of  what  they  had  no  confidence  in. 

313 


5  14  SOCIAL  STRUGGLES. 


ACTIONS   ARE   MORE   TRUSTWORTHY   THAN   WORDS. 

Moneyed  men  have  said  they  were  afraid  of  inflation,  but 
what  a  man  says  is  of  no  account  so  long  as  his  conduct 
shows  that  he  does  not  believe  it  himself.  Capitalists  are 
mostly  men  who  look  out  for  their  own  interests  pretty 
shrewdly.  Personal  property  of  all  kinds  and  real  estate 
were  very  low,  when  the  cry,  "  No  confidence  in  greenbacks," 
was  at  its  height.  If  there  had  been  fear  of  inflation,  cap- 
italists would  have  bought  land  or  personal  property  in 
order  to  secure  themselves  and  get  the  benefit  of  the  rise 
in  price  which  they  knew  would  take  place  under  inflation. 
The  result  would  have  been  a  brisk  demand  for  commod- 
ities and  real  estate,  and  a  consequent  rise  in  their  price. 
But  nothing  of  this  kind  has  happened.  Capitalists  have 
sought  greenbacks,  or  personal  property  readily  convertible 
into  greenbacks,  and  this  shows  what  they  have  really  be- 
lieved. Men  do  not  eagerly  desire  things  in  which  they 
lack  confidence.  During  all  this  time,  United  States 
bonds,  expressly  payable  in  currency,  have  been  higher 
than  the  bonds  payable  in  coin. 

NO   LACK   OF   CONFIDENCE   IN   SILVER   DOLLARS. 

Lately,  it  has  been  said,  that  the  hard  times  are  due  to 
want  of  confidence  in  the  silver  dollar.  But  the  owners  of 
those  dollars  have  not  shown  any  anxiety  to  exchange 
them  for  real  estate,  machinery  and  the  various  other  kinds 
of  property.  The  same  facts  which  show  that  there  has 
not  been  a  want  of  confidence  in  the  greenback  are  true  in 
regard  to  the  silver  dollar.  England  has  no  silver  dollars ; 
but  her  business  is  more  depressed  than  ours.  In  fact, 
there  has  been  for  years  want  of  confidence  in  the  miinber 
of  dollars  which  any  kind  of  property,  real  or  personal, 
would  sell  "for.  In  other  words,  all  classes  of  persons  have 
felt  no  confidence  in  their  ability  to  judge  to  what  extent 
the  currency  would  be  contracted.  Business  has  not  re- 
vived because  prices  were  falling.  As  the  demonetization 
of  silver  by  Germany,  the   United  States,  and  several  other 


CAUSE  OF  speculation: 


315 


nations,  created  new  and  untried  conditions,  no  one  could 
tell  how  far  prices  would  fall. 

Manufacturers  have  been  unable  to  sell  their  goods  at  a 
■profit  because  the  contracting  currency  steadily  lowered 
prices.  Business  men  will  eagerly  push  forward  whenever 
they  think  contraction  has  ceased ;  or,  in  other  words, 
whenever  business  can  be  done  without  danger  that  goods 
will  have  to  be  sold  for  less  than  first  cost,  rent,  clerk-hire 
and  other  expenses. 

THE   CONFIDENCE   CRY. 

When  a  person  proclaims  that  "  confidence  "  is  all  that  is 
needed  to  restore  good  times,  it  is  sometimes  well  to  ask 
him :  Confidence  in  what  ?  The  majority  of  such  persons 
imagine  that  "  confidence  "  in  the  cessation  of  silver  coin- 
age  and  the  still  further  lowering  of  prices  would  revive 
business!  If  such  persons  had  their  way,  what  next  would 
they  want  confidence  in  ? 

The  opening  of  the  Suez  Canal  and  a  large  number  of 
railroads  have  been  assigned  as  a  cause  of  hard  times.  If 
an  increase  in  our  facilities  for  transportation  cause  hard 
times,  then  all  labor-saving  machinery  is  a  detriment. 
Ignorant  mobs  have  frequently  destroyed  labor-saving 
machinery  simply  because  they  were  thoughtless.  Rail- 
roads and  every  other  labor-saving  invention  facilitate  the 
creation  of  wealth,  and  thus  tend  to  make  better  times  for 
the  human  family.  The  men  who  attribute  the  hard  times 
to  railroads  are  those  who  positively  told  us  that  the  green- 
backs made  all  the  trouble.  In  the  spring  of  1878,  the  same 
persons  were  predicting  universal  ruin  in  case  the  silver 
bill  became  a  law.  If  our  superior  modes  of  transportation 
have  plunged  millions  of  people  into  dire  financial  distress, 
we  had  better  fill  up  our  canals,  destroy  our  railroads,  and 
return  to  the  primitive  ox-cart. 

We  have  undoubtedly  built  more  railroads  than  were 
needed.  In  many  cases,  railroads  have  been  built,  not  to 
benefit  the  section  of  country  through  which  they  pass,  but 
to  help  the  men  who  built  them.     There  has  been  a  lack  of 


3i6 


SOCIAL  STRUGGLES. 


judgment  shown  in  building  railroads.  It  is  true  that 
the  capital  and  labor  used  in  building  a  railroad  not  needed, 
are  wasted.  But  this  loss  does  not  materially  affect  the 
value  of  that  form  of  capital  called  money,  which  is  always 
deranged  in  its  workings  whenever  business  is  depressed. 

Many  persons  have  ascribed  railroad  speculation  to  the 
existence  of  greenbacks.  But  to  say  that  selfishness,  want 
of  discretion,  and  lack  of  judgment,  are  due  to  greenbacks 
is  as  unreasonable  as  to  attribute  the  yellow  fever  to  the, 
gold  in  the  Treasury.  Human  infirmities  existed  before 
paper  money  was  invented. 

The  idea  that  railroad  manias  are  prevented  by  "  gold 
payments "  is  utterly  fallacious.  Those  who  embrace  it 
forget  that  England  had  "gold  payments  "  in  1844,  1845, 
and  1846,  and  during  that  time  she  squandered  large  sums 
in  a  wild  railroad  speculation.  The  historian.  Smiles,  in 
speaking  of  that  period,  says  : 

"  Speculators  were  left  at  full  liberty  to  project  and  carry  out  lines 
almost  parallel  with  those  of  existing  companies.  A  powerful  stimulus 
was  thus  given  to  the  existing  spirit  of  speculation  which  rose  to  a  fear- 
ful height  in  1845,  turning  the  whole  nation  into  gamblers." 

Speculation  is  a  natural  tendency  of  human  nature  and 
cannot  be  prevented  by  any  kind  of  currency  whatever. 
Speculation  has  for  its  parents  :  Desire  for  gain,  and 

"  Hope  that  springs  eternal  in  the  human  breast." 

Bad  financial  legislation,  distress,  and  disaster  may  smother 
it  for  a  short  time,  but  it  will  reappear  in  spite  of  calamity 
and  misfortune.  To  stop  it  would  be  to  suppress  the  virt- 
ues of  courage  and  energy,  and,  in  short,  to  change  the 
constitution  of  the  human  mind. 

California  illustrates  the  mistake  of  supposing  that  "  hard 
money  "  generates  business  conservatism,  while  paper  money 
creates  speculation.  That  State  has  always  had  a  gold  cur- 
rency, but  no  place  has  been  the  theater  of  more  and  crazier 
speculations.  She  has  steadily  had  speculations  in  real  es- 
tate,   grain,    mines,   merchandise,    and,  in    fact,    in   almost 


EFFECT  OF  THE  BANKRUPT  LAW.  2 17 

everything  which  can  be  bought  and  sold.  Those  who 
think  gold  a  remedy  for  speculation  should  visit  San  Fran- 
cisco when  business  is  "  lively."  They  would  then  see  a 
crowd  acting  like  a  lot  of  madmen,  and  would  probably  be 
cured  of  that  delusion. 

THE    BANKRUPT   LAW   DID   NOT   MAKE    HARD   TIMES. 

Prior  to  its  repeal,  it  was  widely  proclaimed  that  the  Bank- 
rupt Act  caused  the  hard  times.  It  was  said  that  such  a  law 
enabled  persons  to  escape  payment  of  their  debts.  It  was 
forgotten  that  when  a  man  has  not  enough  property  to  pay 
his  debts,  he  always  "  escapes  "  payment.  The  bankrupt 
law  took  all  the  debtor  had  ;  it  is  difficult  to  see  how  he 
could  surrender  more.  The  immense  number  of  persons 
forced  into  bankruptcy  were  a  result  of  the  hard  times,  not 
the  cause  of  them.  Attributing  hard  times  to  the  bankrupt 
law  was  as  rational  as  to  ascribe  changes  of  temperature  to 
thermometers.  Bankruptcies  are  symptoms,  not  original 
causes. 

The  same  persons  who  clamored  for  the  repeal  of  the 
bankrupt  law,  as  a  remedy  for  the  hard  times  in  1876,  de- 
manded its  re-enactment  in  the  hard  times  of  1884. 

Bankrupt  laws  simultaneously  sponge  out  all  a  debtor's 
property  and  debts.  He  can  then  start  anew  with  legal  se- 
curity that  his  very  first  earnings  and  savings  will  not  be 
seized  as  part  payment  of  a  debt  so  large  that  the  interest 
alone  renders  its  payment  hopeless.  By  thus  lifting  men 
out  of  despair  and  giving  them  an  incentive  to  industry  and 
economy,  bankrupt  laws  preserve  to  society  much  valuable 
service  which  is  lost  when  no  hope  exists  of  ever  peacefully 
owning  and  possessing  property.  It  is  no  benefit  to  soci- 
ety to  oblige  a  man  to  do  business  in  some  one's  else  name, 
or  practice  some  kindred  subterfuge  in  order  to  earn  a  liveli- 
hood. 

OVERPRODUCTION. 

Next  to  the  idea  that  we  have  too  much  money,  the  cause 
of  hard  times  most  frequently  alleged  is"  overproduction." 


318 


SOCIAL  SMUGGLES. 


Manufacturers  and  merchants  have  had  on  hand  more  goods 
than  could  be  sold  except  at  ruinously  low  prices,  and  this 
has  led  to  a  belief  that  we  have  "too  much  of  everything," 
and  therefore  suffer  from  hard  times. 

The  minds  of  many  have  been  confused  on  this  subject, 
by  the  fact  that  while  it  is  impossible  to  produce  too  much 
of  all  kinds  of  wealth,  we  can  produce  too  much  of  a  very 
few  kinds,  and  thus  create  a  glut  in  the  market  for  a  short 
time  of  those  particular  things.  In  other  words,  produc- 
tion may  be  to  a  small  extent  misdirected,  temporarily. 
But  misdirected  production  soon  cures  itself.  Manufact- 
urers could  make  more  plows  than  were  wanted,  but  they 
would  then  divert  part  of  their  force  to  making  other  kinds 
of  tools,  so  that  mistakes  of  that  kind  soon  pass  away  with- 
out serious  detriment  to  society.  At  some  times  and 
places  the  supply  of  certain  goods  may  be  either  in  excess  or 
deficient,  but  when  the  social  forces  are  not  deranged  by 
pernicious  legislation  these  irregularities  work  their  own 
remedy  in  a  short  time  without  producing  material  disturb- 
ance of  industry. 

WHAT    PRODUCTION   IS. 

Production  is  a  term  used  to  define  the  creation  of  wealth  ; 
the  manufacture  of  those  things  which  supply  man's  neces- 
sities, comforts  and  desires.  Therefore,  discoveries  in 
science  and  inventions  in  art  are  not  a  curse,  but  a  blessing. 
Every  new  labor-saving  device,  or  machine,  should  be 
hailed  as  a  friend  whose  benefactions  rightfully  belong  to  the 
whole  human  family.  If  new  inventions  cause  overproduc- 
tion and  overproduction  cause  hard  times,  inventions 
ought  to  be  stopped  at  once.  Let  us  go  back  to  a  system 
when  there  was  less  invention  and  less  wealth. 

But  in  fact,  we  have  not  now,  and  never  have  had  too 
much  wealth  ;  we  have  not  too  many  houses,  too  much  fur- 
niture, too  much  food,  too  many  cattle  and  too  much  labor- 
saving  machinery.  We  hear  no  complaints  of  that  kind. 
People  complain  of  poverty — not  of  wealth.  A  great  deal 
has  been  said  of  the  "  blessings  of  poverty."     But  most  of 


WHA  T  PO  VER TV  US U ALL  Y  DOES.  2 1 g 

US  are  so  unselfish  that  we  are  wilhng  to  resign  our  propor- 
tionate amount  of  such  a  "blessing"  and  surrender  its 
enjoyments  and  advantages  to  other  persons. 

Prominent  men  have  told  us  that  we  have  too  many- 
laborers  ;  that  we  have  improved  too  many  farms  ;  raised 
too  much  farm  produce  ;  made  too  many  goods ;  and 
opened  too  many  mines.  If  that  be  so,  then  we  have  been 
too  industrious ;  we  have  not  enough  drones  and  parasites  ; 
and,  as  a  result,  we  have  grown  so  rich  that  we  are  poor  and 
distressed  ! 

TENDENCY   OF   POVERTY. 

A  few  individuals  may  be  richer  than  is  best  for  them, 
but  mankind  on  the  whole  are  in  no  danger  of  becoming  too 
wealthy.  If  poverty  be  a  good  thing  to  improve  mankind, 
the  pauper  quarters  of  great  cities  should  be  the  best  and 
happiest,  as  they  have  the  greatest  amount  of  this 
"  heavenly  discipline."  The  statistics  of  crime  tell  us  a  dif- 
ferent story.  They  show  that  crime  increases  in  the  same 
ratio  that  a  nation  or  a  locality  is  impoverished.  The  temp- 
tation to  do  wrong  is  increased,  and  the  will-power  to  resist 
temptation  is  weakened,  by  want.  Thousands  of  mechanics 
are  sober  and  reputable  citizens  as  long  as  they  have 
employment  at  fair  wages.  But  when  idle  and  poverty- 
stricken,  they  are  unable  to  withstand  the  accompanying 
depression  of  spirits,  and  seek  refuge  in  the  rum  shop  to 
drown  their  misery  in  still  lower  depths.  Wise  Benjamin 
Franklin  said  :  "  It  is  hard  for  an  empty  bag  to  stand 
upright." 

Poverty  has  a  tendency  to  deteriorate  the  physical,  intel- 
lectual and  moral  condition  of  an  individual,  a  community, 
or  a  nation.  Poverty  narrows  a  man's  sources  of  intellect- 
ual recreation  ;  it  diminishes  his  physical  comforts  ;  it  low- 
ers his  self-respect ;  it  breeds  discontent,  misery  and  crime. 
History  teaches  that  it  is  almost  impossible  to  elevate  the 
moral  or  intellectual  position  of  a  people  without  first  im- 
proving their  material  condition. 


320  SOCIAL  STRUGGLES. 


TRAMPS. 


The  "tramp  problem,"  which  has  been  such  a  mystery  to 
many,  is  the  old,  old  story  ;  it  is  the  logical  and  inevitable 
result  of  creating  such  changes  in  contracts  by  legislation  as 
to  derange  the  capital  used  in  associating  labor  and  capital ; 
and,  consequently,  impoverishing  a  considerable  portion 
of  the  population. 

Those  who  are  weakest  in  mental  and  moral  resolution  are 
most  liable  to  succumb  first  to  the  pressure  of  hard  times  ; 
they  become  discouraged,  lose  self-respect,  feel  embittered 
and  thus  become  tramps.  Many  of  those  who  favor  a  law 
which  makes  poverty  a  penal  offense  would  soon  become 
tramps  themselves  if  their  property  and  means  of  livelihood 
were  taken  from  them.  In  fact,  some  of  the  fiercest  denounc- 
ers of  tramps  have  never  earned  a  dollar  in  their  lives  by 
honest  productive  labor,  but  live  on  means  inherited  from,  or 
created  by  others.  Essentially  they  are  paupers  themselves, 
because  they  have  never  been  self-supporting;  have  never 
contributed  to  society  as  much  as  they  have  received  from  it. 
The  world  does  not  "  owe  a  living  "  to  idle  persons.  Sound 
morality  requires  that  all  who  are  physically  able  to  earn 
their  own  living  should  do  so. 

The  derangement  of  the  money  of  the  country,  the 
machinery  of  distribution,  is  shown  by  the  stoppage  of 
mills  and  factories.  This  is  because  thousands  of  people 
in  bitter  need  of  goods  have  either  been  out  of  employment, 
or  have  been  working  at  such  low  wages  that  they  have  not 
money  to  buy  them.  There  is  no  propriety  in  saying  there 
are  too  many  boots  and  coats  in  the  world,  when,  at  the 
same  time,  the  number  of  persons  in  need  of  boots  and 
coats  is  greater  than  in  times  when  nothing  is  said  of  over- 
production. But  there  is  good  sense  in  saying  that  the 
machinery  by  which  boots  and  shoes  are  distributed  is  not 
working  smoothly  when  multitudes  of  persons,  willing  to 
work,  are  in  enforced  idleness  and  obliged  to  go  without 
boots,  coats  and  many  of  the  comforts  of  life. 


W/-/y  THE  FARMERS  HAVE  SUFFERED.  321 

CAPACITY   TO    LABOR   IS   A   FORM    OF    PROPERTY. 

Whenever  the  production  of  any  of  the  forms  of  wealth 
be  either  wholly  or  partially  suspended,  that  event  necessarily 
implies  the  throwing  out  of  employment  of  one  or  more 
persons.  The  capacity  to  labor  is  a  species  of  property. 
But  it  is  the  most  perishable  of  all  kinds  of  property.  It 
is  destroyed  by  the  passage  of  a  day.  Therefore,  when  a 
man  possess  only  that  kind  of  property  which  is  com- 
posed of  a  capacity  to  daily  perform  some  useful  service  to 
society,  he  loses  all  his  means, — all  his  property  has  gone 
to  waste  every  day  of  his  idleness.  Consequently  his  power 
to  buy  and  use  his  fair  quota  of  the  various  forms  of  wealth 
is  destroyed.  This  diminution  of  the  property  of  an  idle 
man  lessens  his  consumption  of  the  wealth  produced  by 
other  men,  and  still  further  contributes  to  retard  the  distri- 
bution of  wealth.  What  is  childishly  called  "  overproduc- 
tion "  then  exists,  and  charlatans  clamor  for  an  increase  of 
the  very  conditions  which  cause  it. 

THE    FARMERS   AND    OVERPRODUCTION. 

During  recent  political  campaigns  in  which  the  pro- 
priety of  making  gold  the  sole  legal  tender  was  advocated, 
the  farmers  were  told  that  gold  payments  would  raise  the 
price  of  their  crops.  The  argument  was  that  the  price  of 
wheat,  beef,  pork,  and  cotton  was  then  fixed  in  gold  in 
Liverpool — that  gold  had  a  "  fixed  value,  "  and  that  there- 
fore prices  of  farm  products  could  not  decline  ;  but  that 
the  prices  of  most  goods  consumed  by  the  farmer  would 
be  cheaper,  as  the  farmer  would  have  the  gold  for  his  grain 
to  buy  them  with,  and  would  thus  save  the  gold  premium. 
But  events  have  shown  that  gold  payments  have  produced 
an  enormous  fall  in  prices  of  farm  products,  and  now  many 
of  the  papers  talk  about  an  "  overproduction  "  of  pork,  corn, 
wheat,  and  similar  things. 

The  "  overproduction  "  of  farm  products  is  merely  this  : 
their  price,  like  that  of  everything  else,  depends  largely 
upon  the  amount  of  money  in  circulation, — that  has  been 
21 


322 


SOCIAL  STRUGGLES. 


diminished  and  therefore  prices  have  fallen.  The  price  of 
farm  produce  has  fallen  in  Liverpool  just  as  it  has  here; 
and  for  precisely  the  same  reason.  The  American  demand 
for  gold  has  increased  the  demand  for  gold  in  Liverpool ; 
this  has  made  gold  relatively  scarce  and  dear,  and  as  a  result, 
the  prices  of  farm  products  have  fallen  in  Liverpool. 

The  farmer  who  sells  cheese  must  now  milk  more  cows,  to 
obtain  the  same  amount  of  gold  that  he  did  before  1872. 
In  like  manner,  the  cotton  planter  must  raise  more  cotton,  • 
the  wheat  grower  must  raise  more  wheat,  and  he  who  sells 
pork  must  raise  more  hogs.  In  short,  more  of  all  kinds  of 
farm  products,  on  the  average,  must  be  given  as  the  price  of 
25  8-10  grains  of  gold. 

WHO   ARE   BENEFITED   BY   FALLING   PRICES? 

The  question  naturally  arises  :  Who  receive  the  benefit  of 
this  additional  amount  of  produce  which  the  farmers  now 
raise  to  get  the  original  amount  of  gold  ?  The  answer  is 
self-evident :  It  is  those  who  own  the  same  number  of 
dollars  they  did  when  each  one  would  buy  less  farm  prod- 
uce than  at  present.  The  owners  of  bonds,  mortgages 
and  other  forms  of  indebtedness,  and  those  who  have  sub- 
stantially fixed  salaries  are  the  persons  for  whose  benefit 
the  farmer  raises  more  produce  for  the  same  money.  The 
cry  of  "  overproduction  "  always  arises  from  those  classes. 

LONDON  AND  NEW  YORK  ARE  THE  CHIEF  AUTHORS  OF 
THE  CRY  "OVERPRODUCTION." 

England  has  heretofore  been  the  greatest  creditor  nation 
on  the  globe.  England  originated  the  gold  policy.  The 
cry, "  overproduction,"  has  been  heard  in  England  more 
than  in  any  other  country.  If  too  much  wealth  is  produced 
in  England,  how  is  it  that  hundreds  of  thousands  of  her 
people  are  homeless  and  constantly  on  the  verge  of  star- 
vation? 

New  York  is  the  greatest  creditor  city  of  this  country. 
New  York  is  the  fiercest  advocate  of  a  currency  exclusively 


WHEN  A   THING  HAS  GREATEST  VALUE. 


323 


of  gold.       New  York  raises  the   cry  of  "  overproduction  " 
more  than  any  other  American  city.* 

A   TEMPORARY   CURE   OF   "OVERPRODUCTION." 

We  have  seen  that  the  morbid  condition  which  persons, 
either  ignorant  or  designing,  call  "  overproduction  "  is 
usually  treated  as  absurdly  as  the  old  plan  of  withholding 
water  from  patients  consumed  with  fever.  How  then  is  a 
temporary  cure  of  what  is  called  "  overproduction  "  usually 
brought  about  ? 

Simply  by  changing  the  amount  of  business  and  scale  of 
prices  relative  to  the  amount  of  money  in  circulation.  The 
amount  of  money  in  circulation  is  diminished,  but  the  busi- 
ness to  be  done  with  it  is  diminished  still  more.  After 
twenty-five  thousand  business,  men  have  been  made  bank- 
rupt, they  need  less  money  than  before,  and  the  amount 
of  money  is  thus  relatively  increased.  After  prices  are  re- 
duced below  the  level  they  have  stood  for  a  long  time,  a 
smaller  amount  of  money  will  serve  to  exchange  the  same 
amount  of  goods.  When  a  smaller  number  of  men  are  at 
work,  and  those  at  work  get  lower  wages,  it  requires  less 
money  to  maintain  such  an  industrial  organization,  than 
when  all  are  at  work  at  good  wages. 

Commercial  and  industrial  equilibrium  are  thus  restored 
by  a  destructive  and  costly  method.  In  fact,  an  industrial 
war  burns  over  the  country ;  and  a  vast  amount  of  created 
wealth,  and  of  possible  energy  in  form  of  willing  labor,  is 
destroyed  in  the  process,  and  this  is  what  is  called  "scien- 
tific financiering." 

*  A  false,  absurd  theory  once  fully  lodged  in  the  minds  of  a  majority 
of  mankind  has  a  marvellous  vitality.  Over  sixty  years  ago,  Lord  Wel- 
lington told  the  suffering  laborers  of  England  who  were  clamoring  for 
bread,  that  their  troubles  all  arose  "  from  raising  too  much  wheat." 
Quite  recently,  the  Emperor  of  Germany  made  a  speech  in  which  the 
business  depression  which  has  existed  in  that  country  since  the  demon- 
etization of  silver  was  alluded  to.  Like  the  Duke  of  Wellington,  the 
Emperor  thought  "  overproduction  "  the  cause  of  all  the  industrial 
derangement. 


,24  SOCIAL  STRUGGLES. 

Suppose  a  farmer  have  eight  sons  and  land  enough  by  his 
method  of  farming  to  furnish  four  of  them  with  employ- 
ment. Further,  suppose  that  instead  of  adopting  wiser 
and  better  modes  of  cultivating  his  land,  or  instead  of  di- 
versifying the  employment  of  his  sons,  he  should  set  them 
to  fighting  until  only  four  were  left  alive.  The  above  case 
would  be  similar  to  the  present  plan  of  maintaining  our 
social  system  in  existence  by  frequent  industrial  wars  known 
as  periods  of  "  overproduction  "  and  "  hard  times." 

GREAT    CHANGES    IN   THE   AMOUNT    OF   MONEY   IN    CIRCU- 
LATION DESTROY  WEALTH. 

It  is  commonly  supposed  that  sudden  changes  in  prices 
and  alterations  in  contracts  made  by  legislation,  while  they 
take  property  from  one  class  of  persons  and  give  it  to 
another,  do  not  actually  reduce  the  total  amount  of  Value 
in  the  country.  Recent  changes  in  the  ownership  of  prop- 
erty have  been  styled  by  prominent  economists,  "  a  redis- 
tribution of  wealth."  That  is,  legislation  has  taken  wealth 
from  one  class  and  given  it  to  another.  The  plain  truth  is 
that  a  man  when  committing  burglary  is  engaged  in  "  re- 
distributing "  wealth.  But,  in  fact,  such  legal  robbery  does 
not  merely  transfer  property  from  one  man  to  another ;  it 
diminishes  the  total  amount  of  value  in  the  country.  There- 
fore it  should  be  called  a  partial  destruction  of  wealth  by 
rascally  laws. 

WHEN   A   THING   HAS   THE   GREATEST   VALUE. 

We  have  heretofore  found  that  the  value  of  a  thingf  .o  a 
man  depends  entirely  on  the  circumstances  and  condition  in 
which  that  man  is  placed.  Consequently,  a  thing  has  its 
highest  value,  when  in  the  possession  and  ownership  of  a 
man  whose  wants  and  capabilities  are  exactly  supplied  by 
that  thing.  Its  lowest  value  exists  when  owned  and  pos- 
sessed by  a  man  who  has  no  use  whatever  for  it,  and  has  no 
capacity  to  put  it  to  good  use.  Between  these  two  extremes, 
a  thing  may  have  various  degrees  of  value.  A  woolen  mill 
is  far  more  valuable  to  a  man  who  understands  its  manage- 


HOW  VALUE  MAY  BE  DESTROYED. 


325 


ment,  than  to  a  person  familiar  only  with  running  a  steam- 
boat. A  chemical  factory  may  be  valuable  to  one  skilled  in 
the  manufacture  of  chemicals,  and  of  very  little  value  to  a 
farmer.  Dental  instruments  would  be  of  little  use  to  a  black- 
smith.    Numberless  similar  examples  could  be  given. 

WHAT  EACH    PERSON   SHOULD    POSSESS. 

The  tendency  of  society  under  proper  organization  and 
conditions  is  for  each  person  to  become  the  possessor  of 
that  kind  of  property  which  his  peculiar,  natural,  or  ac- 
quired abilities  make  him  best  fitted  to  use  and  manage  to 
the  best  advantage.  Not  only  the  kind  of  property  which 
a  man  shall  own  is  thus  regulated,  but  the  amount  of  certain 
kinds  of  property  which  can  advantageously  be  possessed 
by  different  persons,  also  tends  to  such  self-regulation,  when 
just  principles  govern. 

When  the  various  forms  of  wealth  in  a  country  have  been 
more  or  less  perfectly  adjusted  to  fit  the  special  wants  of 
individuals  differing  widely  in  both  natural  and  acquired 
capacities,  a  forcible  dislocation  of  the  distribution  of  this 
property  inevitably  destroys,  in  greater  or  less  degree,  the 
relations  and  conditions  which  give  value  to  different 
kinds  of  wealth. 

AN   EXAMPLE    OF   DESTRUCTION   OF   VALUE. 

For  example,  here  is  a  man  engaged  in  the  business  of 
bending  wood  for  the  manufacture  of  carriages  and  other 
similar  purposes.  He  owns  a  factory  fitted  up  with  machin- 
ery specially  adapted  to  the  purpose  of  bending  wood  and 
good  for  nothing  else,  A  lawyer  holds  a  mortgage  on  that 
ifactory  for  about  half  its  value  to  the  wood-bender  in  pros- 
perous times.  Suppose  the  industries  of  the  country  are 
deranged,  by  considerably  contracting  the  currenc}\  The 
wood-bender,  unable  to  sell  his  wares,  fails  to  pay  the  inter- 
est on  the  mortgage.  The  mortgage  is  foreclosed  and  the 
lawyer  becomes  the  owner  of  the  factory.  The  wood- 
bender,  impoverished  and  discouraged  by  the  uncertainty  of 


326 


SOCIAL  STRUGGLES. 


mechanical   business,  goes   west    on  a  farm.     The    factory- 
stands  idle. 

In  the  above  case  there  has  been  an  actual  destruction 
of  value,  and  not  merely  a  transfer  of  value  from  one  man 
to  another.  Like  all  other  values,  the  value  of  the  factory 
and  machinery  were  not  intrinsic  or  inherent,  but  depended 
on  conditions, — on  their  being  in  the  possession  and  manage- 
ment of  some  one  with  industry  and  skill  to  properly  man- 
age them.  When  these  conditions  were  destroyed,  a  con- 
siderable portion  of  the  value  of  the  machinery  and  build- 
ing was  also  destroyed. 

Suppose  two  farmers  live  near  each  other  and  each  one 
has  work  on  his  farm  enough  to  employ  four  horses.  One 
lends  the  other  money  in  good  times,  and  in  hard  times 
takes  all  his  debtor's  horses  for  the  debt.  The  creditor  has 
then  eight  horses,  and  has  use  for  only  four  of  them.  Part 
of  the  value  of  the  four  horses  taken  from  the  debtor  is 
destroyed,  because  their  usefulness  is  impaired  by  the 
changed  conditions. 

If  value,  as  commonly  supposed,  were  an  intrinsic  qual- 
ity, such  changes  of  value  as  occur,  by  reason  of  unfortu- 
nate changes  in  conditions  and  circumstances,  could  not 
take  place.  As  a  matter  of  fact,  values  are  often  enor- 
mously changed  by  changes  in  the  circumstances  surround- 
ing a  thing.  In  some  cases  the  effects  of  changes  are 
greater  than  in  others  ;  but,  in  all  cases  whatsoever,  a  mate- 
rial change  of  conditions  necessarily  involves  more  or  less 
change  in  value.  Thousands  of  examples  similar  to  those 
aforesaid  could  be  cited  to  illustrate  the  fact  that  forcible 
transfers  of  property  not  only  often  consummate  a  gross 
wrong  but  usually  are  an  actual  destruction  of  a  portion  of 
the  value  of  the  property  thus  transferred. 

An  immense  number  of  mortgages  have  been  foreclosed 
during  the  past  ten  years.  In  the  great  majority  of  these 
cases,  the  value  of  the  property  so  transferred  shrunk  in 
consequence  of  its  not  being  as  well  adapted  to  the  wants 
of  its  new,  as  of  its  original  owners.  But  this  has  been 
trifling    compared    with    the    destruction    of    values    which 


WHAT  THE  CHINESE  WOULD  THINK. 


327 


would  have  inevitably  occurred  if  the  wishes  of  the  bankers 
and  "scientists"  had  been  gratified  by  destroying  the 
greenbacks,  refusing  to  coin  silver, — thus  making  gold 
the  sole  legal  tender,  and  still  further  contracting  the  cur- 
rency. 

REPORT   OF   AN   EMBASSY   FROM   CHINA. 

While  the  nation  is  suffering  to  a  serious  extent  ffom 
what  is  often  called  "  overproduction,"  suppose  an  embassy 
should  arrive  in  this  country  from  China  charged  with  the 
duty  of  studying  our  "  scientific,"  monetary  and  social  cus- 
toms and  ideas  and  reporting  the  ascertained  facts  to  the 
Chinese  Government.  In  substance,  a  portion  of  such 
report  would  read  as  follows : 

"  We  landed  at  a  port  called  New  York.  This,  we  were  told,  is  the 
most  populous  and  the  richest  city  in  the  whole  land.  As  our  informants 
told  us  New  York  had  more  wealth  than  ten  vast  provinces,  which  they 
here  call  States,  we  wondered  how  it  would  seem  to  walk  through  a  city 
where  there  was  so  much  wealth  and  no  one  was  poor.  Soon  after  our 
arrival  we  had  the  honor  of  being  invited  to  dine  with  some  of  the  princes 
of  New  York.  We  were  utterly  amazed  at  the  display  of  wealth  made 
at  these  feasts.  They  were  not  held,  as  in  China,  in  the  day  time,  but  at 
night.  Soon  after  dark  appears  to  be  the  middle  of  the  day  with  the 
princes  and  queens  of  high  rank  in  this  wonderful  country.  These  high 
dignitaries  have  beautiful  palaces,  elegant  dresses,  and  such  a  multitude 
and  profusion  of  dishes  that  the  greater  part  of  the  dinner  was  simply, 
soiled  and  wasted.  This  we  thought  would  be  lamented  in  China,  but 
in  this  plentiful  country  where  there  is  so  much  wealth,  and  too  much  of 
everything,  we  supposed  it  made  no  difference  how  much  good  food  was 
thrown  away. 

"  At  first  we  passed  our  time  in  the  palaces  of  this  great  city,  and  con- 
versed with  the  great  men,  who  told  us  many  strange  and  interesting 
stories  about  the  way  too  much  wealth  of  all  kinds  was  produced  in  this 
country.  But  we  finally  walked  abroad  to  see  for  ourselves  some  of 
these  wonders.  We  had  been  told  'there  was  too  much  of  everything,' 
and,  as  we  had  never  heard  of  such  a  thing  before,  we  wanted  to  see 
how  it  seemed  and  learn  how  it  could  be.  To  our  surprise,  we  soon  saw 
great  numbers  of  persons  who  appeared  to  be  very  poor.  To  make  sure 
of  this,  we  followed  some  of  these  persons  to  their  homes  and  found  that 
multitudes  of  mechanics  and  artisans  were  crowded  into  one  poorly 
furnished  house.     We  asked  why  they  lived  so,  and  found  them  truly  too 


328 


SOCIAL  STRUGGLES. 


poor  to  hire  more  commodious  quarters.  When  we  got  back  to  the  pal- 
ace where  we  stayed,  we  sent  for  some  of  the  wise  men  and  asked  why- 
more  houses  were  not  built  so  as  to  have  room  enough  to  give  every  one 
a  decent  home.  But  the  wise  men  told  us  the  great  trouble  was  that 
there  had  been  an  overproduction  of  houses  and  there  were  too  many 
already.     This  seemed  very  queer  to  us. 

"  Oji  our  next  walk  we  found  that  many  workmen  complained  of  not 
being  able  to  get  sufficient  food  for  themselves  and  famihes.  When  we 
asked  the  wise  men  how  this  could  be,  we  were  told  that  bread  was  so 
hard  to  get  because  so  much  land  had  been  cultivated  and  the  crops  had 
been  so  abundant  that  there  was  too  much  grain  in  the  country,  and  that 
made  it  bad  for  poor  people. 

"  We  next  inquired  why  more  of  this  surplus  grain  had  not  been  ground 
into  flour  to  make  bread  for  the  hungry  laborers.  Then  the  wise  men 
told  us  that  the  poor  people  found  it  difficult  to  get  flour  because  too 
much  flour  had  already  been  made,  and  so  the  surplus  flour  made  it  hard 
to  get  bread. 

"  It  puzzled  us  very  much  to  find  things  so  different  in  this  country 
from  what  they  are  in  China.  Upon  further  inquiry  how  it  could  be  that 
the  artisans  were  in  want  when  there  was  too  much  flour,  we  were  told 
it  was  because  they  were  not  at  work,  and  so  had  no  money  to  pay  for 
bread. 

"  We  then  asked  if  everything  were  finished,  and  if  there  were  nothing 
more  to  be  done  in  this  country,  and  found  that  a  multitude  of  enterprises 
were  clamoring  for  some  one  to  complete  them.  But  we  were  told  that 
the  workmen  were  without  work  because  the  money  with  which  their 
wages  were  paid  was  too  abundant.  It  amazed  us  to  find  that  the  reason 
the  laborers  were  without  money  was  because  money  was  too  plenty. 

"  We  talked  with  the  chief  money  changers  of  the  city  and  asked 
why  it  was  that  the  plentiful  money  was  not  used  to  hire  idle  men  and 
set  them  to  work.  We  were  told  there  was  plenty  of  idle  money,  but  no 
one  would  hire  it  to  carry  on  business  with  unless  he  was  already  in  bus- 
iness and  was  obliged  to  keep  on.  This  also  seemed  very  curious  to  us, 
and  we  were  still  more  surprised  when  told  that  men  did  not  borrow 
money  to  start  new  business  with  because  the  rate  of  interest  was  so  low. 

"  We  then  asked  if  men  did  not  borrow  money  because  the  interest 
was  too  low,  why  the  money  changers  did  not  raise  the  rate  of  interest  ? 
Thereupon,  the  wise  men  laughed  at  us  and  said,  if  times  grew  much 
worse,  business  men  would  not  borrow  even  if  no  interest  were  asked  for 
use  of  the  money.  This  left  us  more  perplexed  than  ever,  because  in 
China  men  find  it  easier  to  pay  a  low  rate  of  interest  than  to  pay  a  high 
rate. 

"  The  news  in  all  the  public  prints  was  that  merchants  in  great  num- 
bers were   unable  to  pay  their  debts  and  were    becoming   bankrupts. 


VERY  CURIOUS  THINGS. 


329 


This  we  asked  the  wise  men  about,  and  were  told  that  merchants  failed 
because  they  could  not  borrow  money  to  carry  on  their  business,  and  that 
too  much  money  in  the  country  made  this  trouble.  In  China,  when 
money  is  plenty,  merchants  who  want  money  do  not  borrow ;  they  sell 
their  goods  and  get  money  of  their  own.  We  wondered  why  the  mer- 
chants of  this  country  did  not  do  as  our  own  merchants  do.  But  we 
finally  learned  that  they  did  not  sell  their  goods  because  no  one  would 
buy  them.  We  found  that  the  people  did  not  wish  to  exchange  the 
money  of  which  they  had  too  much  for  the  goods  of  which  they  had  too 
Uttle.  This  is  so  contrary  to  anything  which  happens  in  China  that  we 
can  find  no  way  to  explain  it. 

"  In  hopes  to  learn  some  way  of  understanding  the  many  curious 
things  which  are  continually  happening  in  this  strange  land,  we  journeyed 
to  a  great  city  in  an  interior  province  on  the  shores  of  a  fresh-water  sea. 
This  city  is  named  Chicago,  and  is  called  a  great  place  for  distributing 
wealth.  So  we  expected  to  find  that  wealth  had  been  distributed  to  every 
one.  But  we  were  surprised  to  notice,  on  our  first  walk  through  the 
streets,  a  crowd  of  ragged  workmen,  some  of  whom  were  barefooted. 
As  the  weather  was  not  warm,  we  felt  sorry  for  these  men,  and  wondered 
how  in  such  a  rich  place,  where  there  were  so  many  goods,  these  things 
could  be. 

"  The  great  scholars  of  Chicago  told  us  the  workmen  were  ragged  be- 
cause there  was  too  much  cloth  in  the  country  When  we  inquired  why 
this  cloth  had  not  bjeen  made  into  garments  for  poor  people,  we  found 
that  great  trouble  had  arisen  because  so  many  clothes  were  already  made 
up  and  could  not  be  sold.  This,  we  were  told,  was  because  machinery 
now  made  cloth  and  clothes  so  rapidly  that  there  was  too  much  clothing 
in  the  country.  We  also  found  that  many  natives  of  this  extraordinary 
country  went  barefooted  because  there  was  too  much  leather,  and  too 
much  machinery  whereby  boots  and  shoes  were  made  in  too  large 
amounts. 

"  At  night  we  saw  many  persons  in  the  streets  begging  for  a  warm 
shelter,  and  complaining  that  they  had  not  enough  blankets  to  keep  them 
warm.  Then  we  studied  the  learned  magazines,  books,  and  newspapers 
of  this  wonderful  land  and  learned  that  this  was  because  the  warehouses 
and  shops  were  overstocked  with  blankets.  We  also  learned  that  a 
great  supply  of  a  thing  always  forced  multitudes  to  go  without  that  plen- 
tiful thing.  As  people  in  China  get  abundant  things  more  easily  than  they 
do  scarce  things,  this  amazed  us  very  much. 

"  We  next  journeyed  among  the  farmers,  and  heard  sad  complaints 
that  they  were  unable  to  pay  their  taxes  and  other  debts,  and  buy  the 
cloth,  sugar,  tea,  and  other  things  wanted  in  their  houses.  The  farmers 
told  us  that  this  hardship  was  because  the  men  in  the  villages  and  cities 
to  whom  they  sold  their  produce  paid  such  very  low  prices  for  it.     Upon 


330 


SOCIAL  STRUGGLES. 


going  to  dealers  in  farm  products,  and  inquiring  why  such  a  fact  existed, 
we  were  told  that  several  great  scholars  from  a  high  school  of  learning, 
had  been  in  that  province  and  stated  that  the  low  prices  of  farm  produce 
were  caused  by  too  much  money.  Now,  in  China,  produce  is  always 
high  priced  when  money  is  plenty,  and  low  priced  when  money  is  dear 
and  scarce,  and  so  we  were  once  more  bewildered  by  the  events  taking 
place  in  this  extraordinary  country. 

"  We  next  traveled  to  a  great  smoky  city  called  Pittsburg.  There  we 
saw  great  numbers  of  idle  laborers  who  bitterly  complained  of  lacking 
the  necessaries  of  life,  and  among  other  things,  said  they  were  suffering 
from  cold.  This  made  us  think  that  provisions  and  fuel  must  be  scarce 
in  that  province.  We  asked  the  workmen  why  they  suffered,  and  some 
of  them  said  it  was  because  the  convicts  in  States'  prisons  were  kept  at 
work.  These  workmen  thought  if  the  convicts  were  supported  in  idle- 
ness it  would  be  better  for  the  laborers  whose  toil  would  feed  the  con- 
victs. 

"  But  the  chief  rulers  of  the  city  soon  informed  us  that  the  true  reason 
for  the  sufferings  of  the  workmen  was  because  too  much  coal  had  been 
mined,  and  so  the  laborers  had  to  suffer  for  want  of  fuel.  These  learned 
men  also  told  us  that  too  much  beef,  pork,  and  flour  were  in  the  ware- 
houses, and  that  this  made  the  workmen  great  distress.  As  the  work- 
men in  China  have  plenty  to  eat  when  there  are  plenty  of  provisions  in 
the  land,  and  plenty  of  fuel  when  coal  is  plenty,  this  also  seemed  very 
queer  and  difficult  to  explain. 

"  We  have  vainly  traveled  over  much  of  this  strange  land  in  search  of 
some  way  to  explain  the  things  which  happen  therein.  Nearly  everything 
here  seems  exactly  the  opposite  of  what  it  is  in  China.  So  much  is  this 
so  that  we  have  begun  to  reason  directly  contrary  to  the  way  we  reasoned 
in  China.  Whenever  a  thing  becomes  very  plenty  in  this  country,  it  im- 
mediately becomes  very  hard  to  get.  And  when  things  are  scarce,  it  is 
very  easy  to  get  them.  When  a  man  in  this  nation  becomes  very  pious, 
it  is  taken  as  a  sure  proof  that  he  is  a  knave  and  a  cheat.  When  a  man 
calls  himself  '  a  patriot,'  it  is  considered  evidence  that  he  is  trying  in 
some  way  to  defraud  his  country.  And  we  find  that  in  this  country  a 
'  benevolent  man  '  is  a  person  who  gives  for  charitable  purposes  a  small 
portion  of  the  property  he  has  defrauded  other  persons  of. 

"  In  order  to  be  able  to  tell  our  countrymen  how  these  strange  things 
come  to  pass,  we  have  diligently  studied  the  books  and  have  talked  a  great 
deal  with  the  princes  and  the  learned  men  of  this  marvellous  nation.  And 
among  other  efforts  to  understand  these  curious  things,  we  have  talked 
with  a  class  of  people  which  is  quite  large,  and  whom  the  natives  call 
'statesmen.'  These  statesmen  got  their  name  because  they  are  men 
who  are  constantly  planning  to  live  on  the  State  ;  so  the  natives  call  them 
statesmen.      These    wise    and  distinguished    persons   told  us    that  the 


IVHA  T  A  SCHOLAR  IS. 


331 


present  amazing  condition  of  things  did  not  always  exist  in  this  country, 
but  that  it  often  accidentally  happened. 

"  Then  we  tried  to  find  out  what  kind  of  an  accident  occurred  to 
create  such  curious  facts,  but  no  one  could  tell  us.  They  all  thought 
something  had  happened,  but  what  it  was  no  one  knew.  Why  too  much 
of  everything  existed  at  one  time  and  not  at  another,  we  could  not 
learn. 

"  Next,  we  asked  the  statesmen  why  the  rulers  of  the  land  did  not  order 
the  destruction  of  the  surplus  wealth  that  caused  such  distress  among 
the  poor  people.  We  tried  to  learn  why  the  flour,  meat,  buttfer,  cloth, 
shoes  and  other  things  which  were  made  so  hard  to  get  because  there 
was  too  much  of  them,  were  not  partly  burned  up  so  as  to  relieve  the 
existing  distress.  The  statesmen  told  us  such  an  order  would  be  a 
good  thing  if  it  could  be  enforced  ;  but  that  two  things  stood  in  the  way 
of  burning  up  the  surplus  goods.  First.  The  poor  people  would  say: 
'  These  are  just  the  things  we  are  in  need  of — give  them  to  us,  instead  of 
burning  them  up.'  These  poor  people  are  ignorant  of  political  economy, 
they  cannot  see  the  advantage  of  destroying  surplus  goods  which  cause 
hard  times,  and  would  raise  a  riot  if  such  thing  were  attempted. 
Second.  No  one  could  be  found  who  would  be  willing  to  have  part  of 
his  surplus  goods  destroyed.  Each  man  denies  that  he  has  too  much,  and 
insists  that  other  people  have  too  much  of  the  very  thing  he  needs. 

"  We  have  talked  with  a  kind  of  men  in  this  country  that  are  called 
scholars.  This  word  has  a  meaning  here  different  from  what  it  has  in 
China.  We  call  men  who  think,  scholars.  In  this  strange  country,  the 
word  '  scholar  '  means  a  man  who  does  not  think  himself  but  who  has 
read  what  some  dead  scholar  wrote  about  some  other  dead  scholar  who 
wrote  about  another  dead  scholar.  We  asked  these  scholars  why  the 
men  who  had  too  much  of  one  thing  and  too  little  of  another  thing  did 
not  exchange  goods  with  one  another,  and  thus  mutually  supply  each 
others'  wants.  We  asked  why  the  man  with  more  wheat  and  less  cloth 
than  he  wanted  did  not  trade  with  the  man  who  had  more  cloth  and 
less  wheat  than  he  wanted. 

"  The  scholars  told  us  this  was  so  because  trade  in  America  was  car- 
ried on  with  money,  and  there  was  so  much  money  that  trade  had  partly 
stopped.  Then  we  asked,  if  trade  had  so  stopped  because  the  money 
.  was  so  plenty  that  no  one  wanted  it,  and  would  not  give  his  goods  in  ex- 
change for  it.  The  scholars  said  that,  on  the  contrary,  every  one  was 
anxious  to  sell  his  goods  for  money ;  but  money  was  so  excessively  plenty 
that  those  who  had  possession  of  money  did  not  wish  to  exchange  it  for 
goods,  and  therefore  trade  could  not  be  carried  on  because  money  was 
hoarded. 

"  These  sayings  of  the  scholars  puzzled  us  very  much.  We  cannot  see 
why  Americans  should  act   so  unlike  the  people  of  China.     In  China, 


,,2  SOCIAL  STRUGGLES. 

people  hoard  scarce  things  ;  they  do  not  hoard  what  is  so  plenty  that  no 
one  wants  it.  We  find  that  whenever  hard  times  come  on  in  America 
(for  hard  times  is  the  name  Americans  give  to  times  when  there  is  too 
much  of  everything),  and  there  is  too  much  money,  the  laborers  get  less 
money  for  a  day's  labor  than  when  money  is  scarce.  And,  whenever 
there  are  too  much  food  and  clothing  in  the  country,  the  number  of 
beggars  increases.  The  more  these  curious  people  are  in  want,  and  the 
greater  and  wider-spread  the  destitution,  the  more  certain  the  American 
scholars  are  that  there  is  too  much  of  everything,  Events  in  this  country 
produce  results  directly  opposite  from  what  they  do  in*  China.  Plenty 
is  as  much  dreaded  here  as  famine  is  in  our  own  country." 

^'  In  traveling,  we  have  been  frequently  pained  by  evidence  that 
most  of  the  people  of  this  country  have  great  contempt  for  China  and 
Chinese  customs.  To  learn  why  this  is  so  we  have  privately  talked 
with  several  'statesmen,'  and  have  been  told  that  this  ill  feeling  is 
because  its  holders  suppose  our  countrymen  are  mere  imitators,  follow- 
ers of  old  customs,  without  independence  of  thought  or  conduct. 

"  Upon  inquiring  if  the  people  of  this  country  were  original  in  thought 
and  conduct,  we  were  much  amazed  to  discover  that  very  few  of  them 
were,  and  that  these  few  were  called  '  cranks,'  '  lunatics,'  and  other  deri- 
sive names. 

"  We  could  write  about  many  other  perplexing  things,  but  they  are  so 
numerous  and  so  impossible  of  understanding  we  beg  for  our  speedy 
recall  to  our  native  land  where  mysterious  things  do  not  beset  the  peo- 
ple on  every  side." 


CHAPTER  XIII. 

Prices  :  They  are  Always  an  Appraisal  of  two  Things  and  a  Comparison 
of  One  With  the  Other. — What  Hard  Pan  is. —  13th-century 
Prices. — A  Wedding  in  1528. — Causes  of  Fluctuations  in  Prices. — 
Natural  Remedies. — Discounting  the  Future. — Dangers  of  Debt 
under  the  present  Monetary  System. — Power  of  Combined  Money 
Capital. — Irregular  Prices. 

Variations  in  prices  are  not  the  result  of  either  accident  or 

chatice.      They  are  the  legitimate  effect  of  unvarying  natural 

laivs   acting  under    different    circumstances   and  conditions. 

TJie  product  of  an   unchanging  law,  acting  amid  cJidnging 

facts,  nuist  vary  zvith  the  altered  facts. 

Heretofore,  we  have  incidentally  stated  some  of  the  princi- 
ples which  govern  prices,  but  some  further  consideration  of 
this  topic  may  be  desirable. 

Considerable  literature  exists  on  this  subject.  Its  value 
however  is  largely  impaired  by  the  fact  that  its  authors 
have  mostly  assumed  that  the  price  of  a  thing"  at  different 
times  simply  represents  the  variations  in  the  supply  of,  and 
the  demand  for,  that  thing.  Misled  by  the  "  par  value  " 
theory,  heretofore  discussed,  they  have  usually  assumed  that 
the  value  of  gold  and  silver  was  stationary,  and,  in  conse- 
quence, have  been  bewildered  by  facts,  simple  when  viewed 
in  a  proper  light,  but  impossible  to  explain  on  the  usual 
hypothesis. 

Prices  express  ideas  of  the  value  of  things  stated  in  the 
money  of  account.  Variations  may  occur  in  the  price 
of  a  small  number  of  things,  owing  to  their  increased  or 
diminished  supply  relative  to  the  demand,  without  any 
change  in  the  value  of  money.  But  variations  of  the 
general  average  of  prices  always  imply  either  a  rise  or 
a  fall  in  the  value  of  the  money  in  which  the  price  is  stated. 


334 


SOCIAL  STRUGGLES. 


WHAT    HARD    PAN    IS. 


Much  has  been  said  during  recent  years  of  the  desirabiHty 
of  getting  prices  down  to  "  hard  pan."  Many  persons  im- 
agine it  easy  to  put  prices  down  to  a  level  where  they  will 
remain  without  further  fall.  This  can  be  done  by  putting 
prices  at  nothing,  and  in  no  other  way.  There  is  only  one 
limit  to  which  prices  may  either  rise  or  fall,  and  that  is  the 
limit  to  which  the  currency  may  either  be  expanded  or 
contracted.  Contract  the  currency  sufificiently  and  prices 
will  inevitably  fall  to  where  they  were  six  hundred  years  ago. 
What  is  now  called  a  hard-pan  price,  would  then  be  called 
''an  inflated  and  fictitious  value." 

13TH-CENTURY  PRICES. 

In  the  13th  century,  in  England,  money  was  very  scarce 
and  prices  correspondingly  low.  Beef  was  worth  one- 
quarter  of  a  penny  per  pound  ;  butter,  three-fourths  of  a 
penny  per  pound ;  wheat,  from  six  to  ten  pence  a  bushel  ; 
cheese,  one-half  penny  per  pound.  Ordinary  tillable  land 
could  be  bought  for  six  shillings  an  acre.  Laborers'  wages 
were  from  half  a  penny  to  two  pence  a  day.  Carpenters 
received  about  three  pence  a  day. 

Prof.  Rogers  gives  us  the  following  list  of  average  prices 
in  England  from  1449  to  1450 : 

Wheat,  5  s.  10  d.  a  quarter,  i.  <?.,  8  bushels  ;  oatmeal,  5  s.  a 
quarter ;  beef,  4  s.  i  d.  per  cwt.  ;  mutton,  4  s.  6  d.  per  cwt. ; 
pork,  5  s.  per  cwt. ;  geese,  4  d.  apiece  ;  fowls,  i  1-2  d.  apiece  ; 
pigeons,  4  d.  a  dozen  ;  candles,  i  s.  i  d.  per  dozen  pounds ; 
cheese,  1-3  d.  a  pound  ;  butter,  1-2  d.  a  pound  ;  eggs,  5  3-4  d. 
for  ten  dozen.  For  nine  months  of  the  year,  a  master 
mason  got  4  s.  a  week.  Ordinary  masons  got  3  s.  4  d.  a 
week  for  ten  months  of  the  year,  and  2  s.  10  d.  a  week  for 
the  other  two  months. 

A   WEDDING   IN    1 528. 

How  slowly  prices  have  risen  is  shown  by  the  following 
table,  which  is  a  price-list  of  some  of  the  things  consumed 
at  a  wedding  feast  in  England  in  1528  : 


WHY  PI^ICES  CHANGE. 


335 


£     s.  d. 

82  Geys I         o  7 

47  Pyggs • I         3  10 

64  Capons I         9  ^i 

74  Chekyns 8         2 

5  O.xen 6       13  4 

24  Weathers 3         4  o 

6  Calves 20  o 

600  Eggs 6  o 

19  Gallons  Mylke i  7 

72  Barrels  Beer 12  10 

Since  1873  we  have  been  drifting  rapidly  back  toward  the 
prices  in  the  above  table.  When  "  mylke  "  was  sold  for  one 
penny  a  gallon  how  much  wages  did  the  man  get  who 
milked  the  cows? 

CAUSES    OF   FLUCTUATIONS    IN   PRICES. 

Many  of  the  causes  of  fluctuations  in  prices  are  as  com- 
plex as  the  workings  of  the  human  mind.  Hopes  tend  to 
elevate  prices,  and  fears  tend  to  depress  them.  Fear  of  an 
impending  evil,  or  change,  will  often  lower  prices  more  than 
the  event  itself.  A  slight  decrease  or  a  slight  increase  of 
the  average  amount  of  a  crop  of  any  kind  often  raises  or  low- 
ers the  price  far  more  than  the  percentage  of  change  in  its 
amount  would  seem  to  warrant.  Mankind  are  largely  gov- 
erned by  emotions  which  are  always  contagious  and  often 
assume  the  form  of  epidemics.  Men  often  follow  their  lead- 
ers as  blindly  as  a  flock  of  sheep.  Whole  nations  will  be- 
come excited  with  hope  or  plunged  into  gloom  by  distrust 
and  apprehension.  All  changes  in  laws  and  customs, 
every  invention,  new  developments  in  agriculture,  mining, 
mechanics,  and  commerce,  in  short,  every  revolution  of 
the  social  machinery  of  our  race  has  a  tendency  to  affect 
prices. 

Therefore,  although  changes  in  the  amount  of  money  are 
a  dominant  cause  of  changes  in  prices,  they  are  by  no 
means  the  sole  cause  of  such  changes.  It  must  be  borne  in 
mind  that  as  value  is  human  judgment  of  the  comparative 
worth  of  things,  prices  are  therefore  statements  of  relative 
appraisal, — they  are    estimates    of  relative   value.     Conse- 


336 


SOCIAL  STRUGGLES. 


quently   whatsoever  cause    sways  human  judgment,  influ- 
ences prices. 

Those  who  have  made  the  most  careful  examination  esti- 
mate that  from  1492  to  1800  the  gold  and  silver  mines 
of  America  poured  into  Europe  about  thirty  times  the 
amount  of  gold  and  silver  that  previously  existed  there. 
Allowing  about  one-half  of  this  amount  for  losses,  con- 
sumption in  the  arts,  and  shipment  to  the  East,  v/ould  still 
leave  the  amount  of  precious  metals  fifteen  times  as  great  as 
before.  Such  estimates,  however,  must  only  be  approxi- 
mate. 

Various  computations  have  been  made  of  the  rise  in 
prices  which  took  place  during  the  aforesaid  period.  These 
differing  observers  substantially  agree  on  two  points :  First. 
The  increase  of  gold  and  silver  was  a  dominant  cause  of 
a  great  rise  in  the  average  scale  of  prices  during  said  time. 
Second.  The  rise  in  prices  did  not  keep  pace  with  the 
increase  in  the  amount  of  the  precious  metals. 

That  doubling  the  amount  of  gold  and  silver  in  a  country 
during  a  period  of  fifty  years  will  not  double  the  prevailing 
scale  of  prices  in  that  countr}^  a  little  reflection  will  show. 
In  the  first  place,  such  multiplication  of  gold  and  silver  is 
usually  accompanied  with  a  great  increase  in  the  population, 
commerce  and  wealth  of  that  country.  So  that  although 
the  absolute  amount  of  the  precious  metals  may  have  doub- 
led, yet,  at  the  same  time,  their  relative  amount  has  been 
comparatively  little  augmented.  A  change  in  the  number 
of  ounces  of  gold  and  silver  in  a  country  is  governed  by  the 
same  law  which  presides  over  a  change  in  the  number  of  bush- 
els, or  the  number  of  any  other  valuable  things  ;  to  wit,  it 
is  always  the  change  relative  to  all  other  circumstances  and 
conditions  that  determines  what  the  result  of  such  change 
shall  be.  Thus  in  a  country  whose  commerce  is  steadily 
growing,  "the  amount  of  gold  and  silver  should  simulta- 
neously augment  to  meet  the  increased  demand  for  them  ; 
otherwise,  the  amount  of  those  metals  will  steadily  grow 
relatively  smaller  and  a  tendency  for  prices  to  fall  will  nec- 
essarily b-e  produced. 


BALANCES  AND  COMPENSATIONS.  337 

NATURAL   REMEDIES. 

A  principle  extends  throughout  the  entire  reahn  of 
natural  law  whereby  every  manifestation  of  force  carries 
with  it  a  correlative  one.  This  related  force  has  a  ten- 
dency to  modify  or  abate  the  action  of  its  predecessor ;  or  in 
someway  to  supply  what  has  been  called  a  compensatory  or 
balancing  result. 

For  example,  a  great  wave  of  hot  air  immediately  sets  in 
action  forces  whose  tendency  is  to  limit  its  duration  and  les- 
sen its  effect.  The  melting  of  snow  brings  with  it  a  cool- 
ing effect  which  retards  a  rise  in  temperature.  In  like  man- 
ner, every  natural  process  has  its  remedy  and  counterbalance  ; 
and  what  is  true  of  inanimate  things  is  true  of  mankind. 
All  forms  of  human  conduct  have  an  attendant,  as  insep- 
arable from  them  as  a  shadow  from  the  substance,  which 
alters  what  otherwise  would  have  been  their  product. 

Thus  the  actual  condition  of  individuals  and  nations,  in 
all  respects,  is  not  simply  the  fruit  of  their  ignorant  desires 
when  they  committed  certain  isolated  acts  or  steadily  fol- 
lowed a  definite  policy;  the  final  results  of  their  conduct  are 
always  modified  by  attendant  influences  ordained  by  the 
Creator  of  natural  laws.  It  is  as  if  a  beneficent  spirit  were 
constantly  at  hand  seeking  to  interpose  a  cushion  between 
us  and  the  blows  evoked  by  our  folly.  One  manifestation 
of  this  principle  is  called  by  medical  observers  the  "  remedial 
force  of  nature,"  the  "self-limitation  of  disease,"  a  general 
understanding  of  which  would  revolutionize  many  of  our 
modes  of  treating  the  sick.  It  deadens  our  physical  suffer- 
ings, dulls  the  edge  of  mental  anguish  and  often  rescues  us 
in  spite  of  ourselves. 

The  aforesaid  plain  considerations  show  how  a  rise  of 
prices  tends  to  check  itself,  and  prevents  it  from  reaching 
the  height  which  otherwise  would  be  attained.  It  necessi- 
tates the  use  of  more  money  to  exchange  the  same  amount 
of  property,  and  thus  indirectly  diminishes  the  amount  of 
money  relative  to  the  demand  therefor.  In  a  similar  man- 
ner,   falling  prices   bring  with   them  a  tendency  to  check 


33^ 


SOCIAL  STRUGGLES. 


the  fall,  and  give  prices  an  upward  movement.  Lower 
prices  lessen  the  amount  of  money  needed  to  transfer  a 
given  amount  of  value,  and  thus  increase  the  relative  amount 
of  money  in  circulation. 

DISCOUNTING   THE   FUTURE. 

It  is  also  apparent  that  the  statement  of  opinion  which 
forms  a  price  is  not  based  simply  on  the  present  situation 
of  affairs.  What  the  future  is  likely  to  be,,  often  enters  into 
the  calculations  of  those  who  estimate  values,  more  than 
the  actual  existing  facts.  Events,  the  influence  of  which 
will  certainly  depress  prices,  in  the  future,  to  an  unknown 
extent,  are  often  unduly  magnified  in  importance. 

A  belief  that  prices  are  not  to  be  lowered  in  the  immedi- 
ate future  leads  to  two  things,  each  of  which  tends  to  raise 
the  previous  scale  of  prices.  First.  Less  money  is  hoarded, 
and,  consequently,  more  is  put  in  circulation.  In  effect, 
more  money  is  thrown  upon  the  market  and  offered  for 
sale.  When  it  is  supposed  that  prices  will  rise,  it  is  also 
believed  that  hoarding  of  money  will  result  in  loss  to  its 
owner.  Whatever  a  person  wishes  to  buy  can  then  be 
bought  with  less  money  than  after  the  anticipated  rise  actu- 
ally occurs.  Second.  More  business  is  done  with  substitutes 
for  legal-tender  money.  People  are  more  willing  to  give 
promissory  notes  and  other  evidences  of  indebtedness  when 
they  feel  that  the  property  bought  therewith  will  not  depre- 
ciate in  value. 

In  this  way,  prices  often  rise  after  some  contraction  of 
the  legal  tender  has  occurred,  because  an  expansion  of  the 
substitutes  for  legal  tender  has  taken  place  to  an  extent 
greater  than  the  legal-tender  currency  was  diminished. 
The  highest  range  of  prices  occurs  when  a  large  amount  of 
legal  tender  is  in  active  circulation,  and,  at  the  same  time, 
public  hope  is  such  that  private  credit  in  form  of  promissory 
notes  is  also  largely  employed.  Prices  are  lowest  when  the 
legal  tender  is  contracted  simultaneously  with  a  widely 
spread  public  distrust  of  the  future,  which  induces  a  general 
contraction  of   private    credit.      Contraction   of   the  legal- 


FALLING  PRICES  HINDER  SALES. 


339 


tender  currency  is  apt  to  produce  a  contraction  of  private 
credit  in  proportion  as  the  fact  is  known,  and  the  legal- 
tender  contraction  is  supposed  to  be  permanent. 

Prices  are  liable  to  undergo  great  changes  just  in  propor- 
tion to  the  relative  smallness  of  the  amount  of  legal-tender 
money.  This  is  so,  because  the  use  of  private  credit,  as  a 
substitute  for  legal-tender  money,  has  then  more  relative 
influence  in  creating  and  supporting  prices  than  when  a 
greater  proportion  of  legal  tender  is  in  use.  The  extent  to 
which  private  credit  shall  be  used  is  largely  determined  by 
human  judgment  of  future  prices, — by  hope  and  by  fear. 
Therefore,  a  nation  which  has  a  small  amount  of  legal- 
tender  money,  and  makes  large  use  of  private  credit  in  form 
of  promissory  notes,  bank  bills,  and  other  evidences  of  debt, 
is  peculiarly  liable  to  sudden  and  great  fluctuations  in 
prices.  Instead  of  the  "hard  pan"  that  is  talked  of  by 
friends  of  the  English  monetary  system,  the  actual  basis  of 
prices  in  that  country  is  the  ever  swaying  emotions, 
thoughts,  and  conclusions  of  the  human  mind. 

The  percentage  which  prices  fall  in  periods  of  so  called 
"  overproduction  "  is  only  a  portion  of  the  losses  thereby 
sustained  by  business  men.  The  feeling  that  prices  are 
going  still  lower  largely  stops  sales  at  any  price.  The  ma- 
jority of  mankind  are  so  constituted,  that,  when  goods  and 
real  estate  steadily  fall  in  price  until  they  are  offered  for 
one-half  the  former  rate,  they  refrain  from  buying  because 
fearful,  if  they  do  so,  that  the  price  will  sink  to  one-quarter 
of  the  original  sum.  Many  persons  would  be  less  likely 
to  buy  property  for  one-quarter  its  usual  price  than  if  the 
price  had  advanced  beyond  its  ordinary  level.  This  occurs 
because  values  and  prices  are  statements  of  human  judg- 
ment ;  and  the  majority  have  little  confidence  in  their  own 
judgment  independently  of  the  opinions  of  other  people. 

DANGERS     OF     DEBT     UNDER     THE     PRESENT      MONETARY 

SYSTEM. 

The  foregoing  considerations  show  the  hazard  incurred 
under  our  present  financial  system  by  those  who  carry  on 


340 


SOCIAL  STRUGGLES. 


enterprises,  to  a  considerable  extent,  with  borrowed  capital. 
A  man  with  a  hundred  thousand  dollars  of  his  own  borrows 
a  hundred  thousand.  The  country  is  on  what  he  supposes 
"  hard  pan "  ;  i.  e.,  specie  payments.  He  imagines  his 
property  has  an  "  intrinsic  value  "  which  cannot  be  shaken. 

Suddenly,  the  judgments  of  a  large  number  of  persons 
are  influenced  by  fear.  A  few  large  failures  have  occurred, 
and  there  are  rumors  of  more  ;  no  one  wants  anything  but 
legal-tender  money,  and  the  amount  of  that,  relatively  small 
at  first,  is  diminished  by  hoarding.  No  one  will  take  his 
notes.  When  he  tries  to  sell  his  property,  he  finds  that 
the  intrinsic  quality,  he  supposed  it  had,  is  gone.  Men's 
judgments  have  changed,  and  values  have  changed  with 
them.  Meanwhile,  interest,  rent,  the  wages  of  employees, 
and  other  expenses  go  on  without  cessation.  In  the  end, 
all  his  property  is  taken  to  pay  a  "  hard  pan  "  debt  of  one- 
half  the  original  value  of  his  estate. 

Quite  often  in  such  cases,  not  only  is  all  the  debtor's 
property  gone,  but  a  considerable  amount  of  debt  remains 
unpaid.  In  consequence  of  the  delusion  that  hard  times 
were  created  by  a  bankrupt  law,  that  act  has  been  repealed. 
The  debtor  thus  finds  himself  stripped  of  property  and 
without  hope  of  ever  getting  any.  But  he  has  the  satis- 
faction of  constantly  reading  that  "  our  financial  system  is 
highly  scientific."  * 

*  According  to  the  census  of  1880  the  public  and  railroad  indebted- 
ness at  that  time  was  as  follows  : 

United  States  debt, $2,120,415,063 

State  and  other  public  local  debts 821,967,447 

Railroad  debts, 2,812,116,296 

Total $5,754,498,806 

The  total  population  of  the  United  States  at  that  time  was  found  to  be 
50,155,783."  Therefore,  in  round  numbers  each  man,  woman  and  child 
in  the  United  States  in  1880,  on  the  average,  had  to  pay  the  interest, 
directly  or  indirectly,  on  $114.00  of  public  and  railroad  debt.  At  five 
per  cent.,  a  family  of  father,  mother  and  three  children  would  have,  on 
the  average,  to  pay  $28.50  per  annum  for  interest.  If  fifty  cents  can  be 
saved  from  each  day's  pay,  this  means  the  savings  of  57  days'  labor.     If 


CAPITAL  NEEDS  RESTRICTION.  34I 

POWER   OF   COMBINED    MONEY   CAPITAL. 

The  concentration  of  wealth  shown  by  the  foregoing 
figures  suggests  the  facility  with  which  the  money  capital 
of  the  country  can  combine  for  the  purpose  of  securing 
such  financial  legislation  as  may  suit  its  purposes.  It  is  a 
very  moderate  statement,  to  say  that  one  thousand  men 
can  readily  be  selected  from  the  various  financial  centers  of 
the  United  States,  who,  by  virtue  of  their  personal  wealth 

only  25  cents  can  be  saved  from  each  day's  wages,  it  means  the  savings 
of  1 14  days'  labor.  The  more  hours'  labor  "  a  dollar  "  means,  the  heavier 
the  burden  of  public  debt  on  the  laboring  classes.  The  danger  that  a 
course  of  procedure  similar  ta  that  above  sketched  will  be  occasionally 
sprung,  like  a  trap,  upon  unsuspecting  debtors  grows  greater  in  propor- 
tion as  the  capital  of  the  country  accumulates  in  a  comparatively  few 
hands. 

The  census  of  1880  presents  some  facts  which  illustrate  the  tendency 
of  our  present  social  organization  to  concentrate  wealth  in  few  hands  and 
consequently  in  few  places.  According  to  that  report,  the  total  assessed 
value  of  real  and  personal  property  in  seventeen  States  was  as  follows  : 
Virginia,  $308,455,135;  West  Virginia,  $139,622,705;  North  Carolina, 
$156,100,202;  South  Carolina,  $133,560,135;  Georgia,  $239,472,599 ; 
Florida,  $30,938,309;  Alabama,  $122,867,228;  Mississippi,  $1 10,628,129  ; 
Tennessee,  $211,778,538  ;  Arkansas,  $86,409,364  ;  Kansas,  $160,891,689  ; 
Louisiana,  $160,162,439;  Texas,  $320,364,515;  Nebraska,  $90,585,782; 
Colorado,  $74,471,693;  Nevada,  $29,291,459;  Oregon,  $52,522,084. 
Total,  $2,428,122,005.  At  the  same  time  the  following  seventeen  counties 
and  cities  were  assessed  as  follows  :  San  Francisco  Co.,  Cal.,  $244,626,- 
760  ;  Cook  Co.,  111.,  $148,982,393  ;  Orleans  Co.,  La.,  $91,794,350;  Bristol 
Co.,  Alass.,  $100,029,138;  Essex  Co..  Mass.,  $155,241,900;  Middlesex 
Co.,  Mass.,  $258,392,568  ;  Suffolk  Co.,  Mass.,  $658,220,621  ;  Worcester 
Co.,  Mass.,  $127,690,969;  Baltimore,  Md.  (CityV $244,043,181  ;  St.  Louis 
(City),  $165,288,400  ;  Essex  Co.,  New  Jersey,  $107,385,475;  Kings  Co., 
New  York,  $244,556,977;  New  York  Co..  New  York,  $1,094,069,335; 
Hamilton  Co.,  O.,  $207,324,047;  Allegheny  Co.,  Penn.,  $170,708,301; 
Philadelphia  Co.,  Penn.,  $581,729,759;  Providence  Co.,  R.  L,  $178,448,- 
469.  Total,  $4,898,532,653.  It  further  appears  that  Suffolk  Co.,  Mass., 
New  York  Co.,  New  York,  and  Philadelphia,  Penn.,  had  a  total  wealth 
of  $2,334,019,715.  If  we  omit  the  State  of  Mississippi  from  the  foregoing 
list  of  States,  the  three  cities,  Boston,  New  York  and  Philadelphia  have  a 
greater  wealth  than  the  other  aforesaid  sixteen  States  with  their  vast  area 
of  fertile  land. 


242  SOCIAL  STRUGGLES. 

and  leadership  of  other  rich  persons,  can  devise  and  indi- 
cate the  policy  which  the  concentrated  capital  of  the  land 
will  combine  its  energies  to  secure.  This  is  to  say  that,  at 
any  time  during  the  past  twenty  years,  the  financial  legisla- 
tion of  the  United  States  would  have  been  completely 
reversed,  if  one  thousand  of  the  leading  capitalists,  whose 
wealth  is  chiefly  in  money  and  evidences  of  indebtedness, 
had  thought  it  to  their  personal  pecuniary  interest  to 
reverse  it. 

The  remedy  for  preventing  concentrated  capital,  by  its 
control  of  the  press,  the  platform,  and  the  pulpit,  from 
securing  special  legislation  is  obvious.  The  mass  of  voters 
should  learn  economic  principles  sufficiently  to  immediately 
recognize  measures  cunningly  intended  for  the  aggrandize- 
ment of  a  special  class,  at  the  expense  of  all  other  citizens. 
They  should  fully  understand  that  the  major  portion  of  the 
practical  effect  of  financial  legislation  is  the  influence  it  will 
exert  either  to  raise  or  lower  the  average  scale  of  prices. 
Furthermore,  they  should  recognize  that  prices  are,  on 
the  average,  uniform  just  to  the  extent  that  the  volume  of 
circulating  money  enlarges  and  diminishes  simultaneously 
with  an  increased  or  a  diminished  demand  for  it.  There- 
fore a  money  and  its  regulation  are  perfect  just  in  the 
degree  that  money  maintains  a  uniformity  of  amount  RELA- 
TIVE to  the  demand  for  it  ;  and  such  uniformity  is  only 
possible  when  the  materials. from  which  the  money  is  made 
are  immediately  responsive  to  either  an  increased  or  a 
diminished  demand  for  money;  i.,  c,  there  should  never  be 
a  dearth  of  the  raw  materials  of  money,  and  upon  a  cessa- 
tion of  the  demand  therefor,  surplus  money  should  rapidly 
disappear  from  circulation.  Then  prices  would  be  com- 
paratively uniform. 

IRREGULARITY   OF   PRICES. 

The  following  article,  taken  from  the  New  York  Tribune 
of  August  2,  1886,  is  a  good  specimen  of  the  kind  of  reason- 
ing used  by  those  who  believe  in  the  mysterious,  "unvary- 
ing "  value  of  gold  : 


PRICES  CHANGE  UNEQUALLY.  34^ 

"  WHY   SILVER   FALLS. 

"  An  ounce  of  bar  silver  was  worth  a  bushel  of  wheat  at  New  York  a 
year  ago,  and  is  worth  a  bushel  of  wheat  at  New  York  now.  Then  sil- 
ver sold  at  49.i9d.  per  ounce  in  London,  and  wheat  99  1-4  at  New  York. 
Silver  was  held  at  42  3-4d.  on  Saturday  in  London,  and  wheat  at  85  1-4 
at  New  York.  Silver  has  fallen  over  13  per  cent.,  but  wheat  has  also 
fallen  over  13  per  cent,  during  the  year. 

"  Careless  thinkers  say,  '  This  is  only  an  increase  in  the  purchasing 
power  of  gold,  which  has  been  made  artificially  scarce.'  If  it  were  so, 
other  prices  would  be  changed  in  like  manner  and  measure.  But  corn 
then  worth  52  1-4  cents  is  now  worth  50;  cotton  then  worth  10  1-2  cents 
is  now  worth  9.56;  lard  then  worth  63-4  is  now  worthy;  pork  then 
worth  $1 1.50  now  commands  the  same  price  ;  coffee  then  worth  8  5-8  now 
sells  at  9  1-2  ;  sugar  then  worth  5.06  now  sells  at  4.69;  iron  then  worth 
$17.75  is  now  worth  $18;  Bessemer  rails  then  worth  $27.25  are  now 
worth  $34.50  ;  tin  then  worth  22  1-4  is  now  worth  21  3-4;  copper  then 
worth  II  cents  is  now  worth  10;  lead  then  worth  4. 1 5  is  now  worth  4.80. 
Here  are  changes  so  irregular  that  there  has  certainly  not  been  a  general 
increase  of  13  per  cent,  in  the  purchasing  power  of  gold." 

The  above  is  followed  by  a  verbose  way  of  saying  that 
silver  coinage  "  operates  to  degrade  and  depress  silver  as 
nothing  else  could." 

The  exercise  of  a  little  common  sense  and  a  little  consid- 
eration of  the  facts  which  occur  when  prices  are  either 
steadily  falling  or  steadily  rising  will  explain  the  aforesaid 
irregular  prices. 

When  the  currency  is  contracting,  general  prices,  say  of 
a  hundred  leading  articles,  never  fall  in  a  uniform  manner. 
The  price  of  some  things  may  decline  within  a  year  fifteen 
per  cent,  and  of  others  only  five  per  cent.  Meantime,  some 
prices  may  remain  unaffected,  or  may  even  advance.  Spe- 
cial facts  and  conditions  may  temporarily  be  potential 
enough  to  keep  a  few  things  from  sharing  in  the  general 
decline  of  prices.  A  notable  illustration  of  this  is  seen  in 
the  price  of  real  estate.  For  the  past  thirteen  years,  in  con- 
sequence of  contracting  the  currency,  there  has  been  a 
general  tendency  for  real  estate  to  fall  largely  in  price.  But 
the  land  situated  in  a  few  locations  has  meanwhile  risen  in 


344 


SOCIAL  STRUGGLES. 


value,    as   the   result    of   the  special  circumstances   under 
which  it  was  placed. 

A  similar  fact  occurs  when  the  currency  is  expanding  and 
prices  are  consequently  rising.  There  is  never  a  regular 
ratio  and  percentage  in  the  manner  by  which  prices  change 
from  month  to  month  and  from  year  to  year.  The  line  of 
advance,  like  that  which  marks  the  changes  of  the  seasons, 
is  an  irregular  one.  While  the  prices  of  a  majority  of  ar- 
ticles have  risen,  by  a  varying  percentage,  a  few  things  may 
stand  at  the  old  quotations,  or  even  be  lower  than  before 
the  general  rise  of  prices  set  in.  This  may  easily  be  verified 
by  examining  a  file  of  commercial  newspapers  published 
from  1 86 1  to  1864. 

The  aforesaid  irregularity  with  winch  the  prices  of  differ- 
ent things  vary  can  only  be  explained  by  reference  to  the 
causes  which  produce  all  changes  in  prices.  The  range  of 
prices  at  a  given  time  is  the  resultant,  the  product,  of  the 
different  forces  and  conditions  which  are  then,  and  for  some 
time  previously,  have  been  in  existence  and  the  public  judg- 
ment thereon. 

An  increase  or  a  diminution  of  the  currency  changes  the 
conditions  from  which  prices  spring  in  two  ways.  First,  by 
the  broad  general  influence  exerted  by  such  increase  or 
diminution. 

Second,  this  general  influence  operates  in  various  ways  on 
different  things,  because  each  of  those  things  is  more  or  less 
surrounded  with  special  conditions  and  circumstances. 

A  heavy  rain-storm  operates  in  different  ways  on  a  crop  of 
grass.  It  may  benefit  it,  but  if  the  grass  have  been  cut  and 
dried  it  may  largely  destroy  its  value.  A  general  influence 
of  any  kind  thus  produces  results  varied  by  the  conditions 
it  affects. 

A  tendency  to  a  general  rise  or  fall  in  prices  sets  in 
motion  and  operation  currents  and  forces  within  the  general 
influence.  The  result  of  these  opposing  forces  is  seen  in 
the  fact  that  the  order  and  ratio  in  which  prices  rise  and 
fall  vary  both  in  time  and  in  degree.  These  fluctuations  of 
prices  are  a  prominent  evil  of  a  currency  subject  to  great  al- 


UNEQUAL  PRICES  CAUSE  INJUSTICE.  345 

terations  in  relative  amount.  If  prices  of  all  things  thereby 
steadily  rose  and  fell  by  a  regular  ratio  and  percentage, 
such  prices  could  be  estimated  and  allowed  for  with  little 
difificulty  in  all  forecasts  of  the  future.  In  fact,  if  that  were 
the  case,  no  matter  what  changes  prices  were  undergoing,  a 
little  arithmetic  would  enable  a  business  man  to  translate  an 
expanding  or  a  contracting  currency  into  a  stable  one. 

But  where  a  general  tendency  has  set  in  action  a  hundred 
minor  forces,  each  of  which  is  meeting  a  different  resistance 
and  operating  under  special  facts  and  circumstances,  not 
fixed  but  constantly  changing,  it  is  utterly  impossible  for 
any  one  to  accurately  predict  what  the  price  of  a  given 
thing  at  a  specified  date  will  be.  The  result  is  to  reduce 
mercantile  transactions,  more  or  less,  into  a  game  of  hazard, 
in  which  shrewd,  cunning  persons  who  watch  the  markets 
have  an  advantage  over  the  masses  whose  thoughts  are  di- 
rected solely  toward  the  creation  of  commercial  products. 

Even  between  persons  who  have  no  desire  to  join  the 
predatory  classes,  the  aforesaid  inequalities  of  prices  often 
cause  one  person  to  inflict  an  unintentional  injury  on 
another.  A  forcible  example  of  this  occurred  during  the 
life  of  the  Southern  Confederacy,  in  which  an  acquaintance 
of  mine  was  one  of  the  actors.  She  sent  her  child  to  a 
school  at  which  the  yearly  charges,  before  the  war,  were  $100, 
but  at  that  time  said  charges  were  $1500.  She  had  a  steer 
which  in  ordinary  times  was  worth  about  $30.  This  animal 
she  sold  for  $1500,  and  with  the  money  paid  the  yearly 
charge, — thus  discharging  the  debt  with  less  than  one-third 
the  value  she  would  ordinarily  have  justly  paid. 

The  above  was  one  of  a  vast  number  of  instances  in  the 
Confederacy  in  which  the  equities  between  individuals  were 
not  fulfilled  because  of  unsettled  prices.  Great  as  the  evil 
of  an  enormous  rise  of  prices  was,  that  wrought  only  a  por- 
tion of  the  mischief  actually  done.  The  irregularity  of  that 
rise,  the  eccentricity  of  prices,  the  fact  that  the  products 
of  one  man's  labor  rose  in  price  much  more,  within  a  given 
time,  than  the  products  of  another  person's  labor,  was  also 
a  fruitful  source  of  evil.     This  arose  from  the  lack  of  estab- 


346  SOCIAL  STRUGGLES. 

lished  uniformity  of  public  opinion  and  judgment  in  regard 
to  the  value  of  various  things  relative  to  the  value  of  money. 
Circumstances  changed  so  rapidly  that  time  did  not  permit 
the  formation  of  substantial  unanimity  as  to  what  consti- 
tuted a  fair  appraisal  and  comparison  of  relative  values. 

The  idea  expressed  in  said  editorial,  that  the  way  to  raise 
the  price  of  silver  would  be  to  diminish  the  demand  there- 
for, has  heretofore  been  so  fully  discussed  that  it  is  needless 
to  do  more  than  suggest,  if  that  be  so,  the  converse  is  also 
true,  viz.,  the  greater  the  demand  which  may  hereafter 
arise  for  silver,  the  lower  the  value  of  that  metal  will  be. 
This  simply  contradicts  all  reason  and  all  human  experience 
in  regard  to  silver  and  everything  else. 

WHY   FALLING   PRICES   THROW   WORKMEN    OUT   OF 
EMPLOYMENT. 

When  prices  are  steadily  falling,  large  numbers  of  persons, 
able  and  willing  to  Avork,  are  always  unable  to  obtain  em- 
ployment. This  fact  is  well  known,  but  the  cause  of  it  is 
generally  misunderstood.  It  is  said,  in  a  great  variety  of 
ways,  that  there  are  then  more  laborers  than  requisite  to 
perform  the  work  which  employers  wish  done.  And, 
curiously  enough,  those  who  make  this  almost  self-evident 
statement  fancy  they  have  thus  described  the  malady  from 
which  society  is  suffering.  In  fact,  they  have  merely  stated 
one  symptom  the  source  of  which  has  not  attracted  their 
attention. 

In  order  to  find  out  why  one  hundred  thousand  persons 
hire  less  workmen  than  come  to  them  for  employment,  let 
us  examine  the  conduct  of  one  of  those  employers.  A 
owns  a  large  number  of  vacant  lots,  and  is  willing  and 
anxious  to  erect  houses  thereon,  provided  the  houses  when 
finished  can  be  sold  for  the  cost  of  building  them.  This  can 
be  done  when  prices  are  stable.  But  when  prices  are  fall- 
ing, so  that  a  building  which  cost  five  thousand  dollars  can- 
not be  sold  for  more  than  forty-seven  hundred  dollars,  if  A 
build  a  house  and  sell  it,  he  is  three  hundred  dollars  worse 
off  than  if  he  had  done  nothing.     The  result  is  that  he  will 


RESULT  OF  FALLING  PRICES. 


347 


stop  building  houses  for  sale,  and  consequently  will  not  em- 
ploy the  workmen  he  otherwise  would. 

In  the  aforesaid  case,  the  reasoning  and  the  conduct  of  A 
are  precisely  analogous  to  the  reasoning  and  actions  of  a 
multitude  of  other  persons  who,  under  a  great  variety  of  sim- 
ilar circumstances,  would  like  to  engage  in  enterprises  which 
necessitate  the  employment  of  labor.  They  refrain  from 
them,  not  because  there  is  too  much  wealth  already  created, 
but  because  the  work,  when  completed,  cannot  be  sold  for, 
or  will  not  yield  in  some  form,  the  munber  of  dollars  which 
were  required  to  complete  it. 

A  number  of  wagons  may  cost  ten  thousand  dollars  to 
build  and  can  only  be  sold  for  nine  thousand  five  hundred 
dollars.  But  some  one  says  :  Are  not  the  nine  thousand 
five  hundred  dollars  of  as  much  value  when  the  wagons  are 
sold  as  the  ten  thousand  dollars  were  when  the  wagons  were 
in  construction?  Granted.  But  that  fact  does  not  help  the 
matter.  On  the  contrary,  it  is  the  root  of  the  difficulty. 
The  wagon  builder  says:  *'  If  I  had  remained  idle  and  loaned 
my  money  for  nothing,  on  good  security,  I  would  now  be 
worth  five  hundred  dollars  more  than  I  am.  I  will  lock  up 
my  shop  until  prices  have  ceased  to  fall.  There  is  neither 
pleasure  nor  profit  in  spending  fifty  dollars  on  a  wagon  and 
then  selling  it  for  forty-five  dollars." 

When  occurrences  similar  to  the  aforesaid  take  place,  the 
"  dollar,"  although  nominally  of  the  same  value — i.  e.,  at  par 
— is  actually  steadily  rising  in  value.  Meantime,  interest  is 
apparently  low  and  there  is  a  common  belief  that  "  money 
is  cheap." 


CHAPTER  XIV. 

Specie  Payments. — National  Banks. — The  essential  Condition  requisite 
to  give  Value  to  Paper  Money. — Specie  Payments. — Chief  Objection 
to  Specie  Payments. — How  Banks  of  Issue  raise  and  lower  Prices. 
— Essential  feature  of  Specie  Payments.  —How  Bankers  evade  their 
Promises. — The  Chief  Evil  of  Specie  Payments. — What  occurred  in 
1857. — ^What  Experience  has  shown. —  Legitimate  Banking. — Na- 
tional Banks  have  Special  Privileges. — National  Banks  are  unfair 
Monopolies. — The  Flow  of  Coin. — Results  of  Draining  away  Money. 
— A  Universal  Natural  Law. — What  we  should  Attempt. — The  End 
toward  which  we  are  Traveling. 

A  great  outcry  would  arise  if  legislation  zvere  proposed 
which  would  enable  any  farmer,  ozvning  and  tilling  one  hun- 
dred acres  of  land,  to  borrozv  one-Jialf  the  value  of  that  land 
of  the  Government  at  one  per  cejit.  per  annum.  But  would 
this  privilege  be  any  more  unjust  to  other  citizens,  than  to  per- 
mit national  bankers  to  borroiv  Government  money  at  one  per 
cent,  per  annum  ? 

hi  an  advanced  stage  of  civilisation,  bankers  are  as  neces- 
sary and  useful  members  of  society  as  blacksmiths.  The 
issue  of  paper  money  by  bankers  is  a  wrong  not  necessarily 
or  properly  connected  zvith  their  legitimate  business  and 
should  not  be  confouiided  zvith  it. 

To  give  a  small  class  of  persojis  such  pozver,  and  place  them 
in  such  circumstances  that  they  can,  wit Ji  profit  to  themselves, 
injure  the  business  and  property  of  all  other  citizens,  is  both 
unzvise  and  unsafe.  When  a  nation  places  its  sovereign  right 
to  issue  money  into  the  hands  of  bankers,  it  gives  those  persons 
the  power  to  so  manipulate  the  currency  as  to  raise  or  lower 
prices,  thus  placing  them  under  temptation  to  enricJi  tJiem- 
selves  at  the  public  expense. 

We  have  heretofore  found  that  the  value  of  one  of  the 
units  of  a  nation's  money  depends  chiefly  on  the  number  of 
those  units  in  circulation.  No  matter  of  what  material  this 
circulating  money  be  made,  whether  silver,  gold,  or  paper,  it 
is  all  subject  to  the  same  general  law.     Many  persons  have 

348 


LIMITATION  OF  MONEY.  249 

been  confused  on  this  topic  from  not  remembering  one 
practical  fact  relating  to  the  manufacture  of  money. 

The  raw  material  from  which  gold  and  silver  coins  are 
made  is  limited  by  nature  to  a  comparatively  small  amount. 
This  renders  any  other  limitations  on  its  coinage  unneces- 
sary. For  century  after  century  those  metals  have  had  no 
artificial  restriction  on  the  amount  of  them  which  should  be 
coined.  The  existing  limitation  on  the  coinage  of  silver  is 
of  recent  origin  and  will  probably  soon  be  removed. 

But  the  material  from  which  paper  money  is  made  can 
be  produced  in  such  enormous  quantities  that  an  artificial 
limitation  on  the  amount  of  money  made  from  it  is  abso- 
lutely necessary.  When  properly  limited  in  amount,  paper 
money  is  superior  to  all  other  kinds. 

THE    ESSENTIAL    CONDITION    REQUISITE   TO     GIVE     VALUE 
TO    PAPER   MONEY. 

It  needs  on  it  no  promise  of  redemption  in  coin  or  bonds. 
All  that  is  necessary  is  the  stamp  of  the  sovereign  power, 
making  it  a  full  legal  tender  and  LIMITATION  IN  AMOUNT. 
Congress  can  pass  a  law  by  virtue  of  which  all  the  existing 
greenbacks  and  bank-notes  shall  be  destroyed,  and  their 
place  filled  by  an  issue  of  paper  money  which  shall  simply 
bear  an  inscription  similar  to  that  now  placed  on  gold  and 
silver  coins  ;  viz.,  "  United  States  of  America.  One  dol- 
lar," and  a  kindred  inscription  for  other  denominations. 

The  issue  of  any  paper  money,  except  these  bills,  by  any 
person  or  authority,  to  be  forbidden,  both  in  peace  and  war, 
under  any  pretext  whatsoever.  This  money  to  be  a  full 
legal  tender  at  its  face  value,  and  to  be  regulated  in  amount 
by  some  efficient  check.  Such  money  would  be  superior  to 
any  we  have  ever  had.  But  this  is  not  yet  generally 
known. 

SPECIE   PAYMENTS. 

Our  monetary  system  represents  the  prevalent  belief  that 
paper  money  is  more  convenient  than  any  other,  but  worth- 
less unless  it  has  printed  thereon  a  promise  of  its  being  re- 


350 


SOCIAL  STRUGGLES. 


ceived  at  its  face  value,  and  an  equal  amount  of  coin  given 
in  exchange  therefor.  The  issue  by  corporations  of  prom- 
issory notes  to  be  used  as  money  and  redeemed  by  the  mak- 
ers, in  coin  on  demand,  is  therefore  called  "  specie  payments." 
The  notes  so  issued  as  money  are  theoretically  always 
worth  as  much  as  coin,  and  are  loaned  on  interest  by  dis- 
counting promissory  notes  due  in  a  short  time.  The  profit 
of  this  business  therefore  depends  on  the  amount  of  paper 
money  which  can  be  kept  out  at  interest,  in  proportion  to 
the  amount  of  coin  kept  on  hand  for  its  redemption.  If  no 
more  paper  were  issued  than  coin  kept  in  the  bank,  the 
only  advantage  of  bank  paper  would  be  in  the  superior  con- 
venience of  paper  money  over  coin  and  the  smaller  danger 
of  its  being  counterfeited.  But  as  these  advantages  would 
inure  to  the  public  and  not  to  the  bank,  there  is  no  induce- 
ment for  a  bank  to  pursue  such  a  course. 

Bankers  who  issue  convertible  notes  are  prone  to  inflate 
paper  money,  and  to  keep  on  hand  the  smallest  possible 
amount  of  coin.  They  are  in  the  position  of  a  judge  trying 
a  case  in  which,  personally,  he  has  a  large  pecuniary  interest. 
The  system  of  convertible  bank-notes  thus  violates  the 
established  principle  that  '*  human  nature  should  not  be 
tempted." 

CHIEF   OBJECTION   TO   SPECIE   PAYMENTS. 

Therefore  the  chief  objection  to  what  is  called  "  specie 
payments  "  is  the  fact  that  it  does  not  secure  stability  in  the 
amount  of  the  money  in  circulation.  When  the  currency 
should  be  contracted,  the  bankers  are  prone  to  inflate  it  ; 
and  when  they  should  increase  it,  they  are  apt  to  contract. 
They  are  governed  solely  by  what  they  deem  their  own  in- 
terest with  little  reference  to  what  is  best  for  the  whole 
community.  Before  the  war,  the  Connecticut  State  banks 
were  considered  as  safe  and  strong  as  any  in  the  Union  ;  in 
fact,  their  notes  stood  much  higher  than  the  average.  In 
1861,  when  the  Connecticut  banks  suspended  specie  pay- 
ment, their  reserve  of  coin  was  higher  than  their  average  re- 
serve for  the  previous  twenty-five  years.     Their  coin,  how- 


EVILS  OF  BANKS  OF  ISSUE.  35 1 

ever,  was  only  twelve  per  cent,  of  their  paper.  They  could 
maintain  specie  payments  only  on  condition  that  seven- 
eighths  of  their  paper  were  not  presented  for  payment. 

HOW   BANKS   OF   ISSUE   RAISE   AND    LOWER   PRICES. 

When  public  confidence  that  prices  are  not  likely  to  fall, 
and  in  the  immediate  future  of  business  is  high,  there  is 
little  demand  for  coin,  as  there  is  then  little  use  for  it.  The 
banks  are  then  constantly  tempted  to  issue  more  notes,  as 
all  the  notes  they  issue  draw  interest,  and  this  increases 
their  profits.  The  issue  of  additional  notes  tends  to  cause 
a  rise  in  prices.  A  rise  in  prices  generates  increased  confi- 
dence in  the  future,  and  affords  buyers  an  opportunity  to 
make  a  profit  by  purchasing  to  the  full  extent  both  of  their 
means  and  credit.  This  causes  an  increased  demand  for 
bank-notes  with  which  to  make  these  purchases  and  meet 
the  credits  when  they  fall  due.  Thus  one  cause  reacts  on 
another,  until  more  or  less  excitement  is  produced.  An  in- 
crease of  excitement  increases  the  amount  of  buying  and 
selling  and  still  further  raises  the  demand  for  bank-notes. 
Finally,  some  disaster  occurs  which  alarms  the  public  mind  ; 
— a  rush  is  then  made  for  coin  and  a  disastrous  panic  is  the 
result.  The  outstanding  bank  paper  is  not  legal  tender; 
and,  as  in  a  panic,  nothing  is  good  to  pay  debts  with  but 
legal-tender  money,  there  is  a  fierce  struggle  to  get  legal 
tenders.  This  is  intensified  by  the  generally  known  fact 
that  there  is  not  coin  enough  to  redeem  all  the  outstanding 
paper,  and  therefore  those  who  apply  first  will  get  coin  and 
the  rest  will  find  that  the  bank  has  suspended  payment. 
In  the  panic  of  1873,  the  tendency  of  men,  under  such  cir- 
cumstances, to  eagerly  want  legal  tender  was  illustrated  by 
the  fact  that  greenbacks  then  rose  to  a  premium  of  four  per 
cent,  over  national  bank-notes.  A  man  bound  to  pay  his 
note  before  a  given  hour,  or  fail,  wants  something  which  the 
creditor  is  legally  bound  to  accept.  This  feature  of  a  panic 
would  be  materially  mitigated  by  making  all  the  paper 
money  a  legal  tender  for  all  purposes.  But  in  order  to  do 
that,  the  .whole  idea  at  the  bottom  of  the  specie  payment 


352 


SOCIAL  STRUGGLES. 


plan  must  be  abandoned.  We  must  adopt  some  other  and 
more  efficient  mode  of  regulating  and  limiting  the  amount 
of  paper  money. 

ESSENTIAL   FEATURE   OF   SPECIE   PAYMENTS. 

Specie  payments,  so  called,  is  nothing  more  nor  less  than 
a  system  whereby  the  amount  of  paper  money  is  limited 
solely  by  the  liability  and  obligation  which  the  bank  issuing 
it  is  under  to  redeem  paper  dollars  with  silver  or  gold  dol- 
lars. Subject  only  to  that  check,  there  is  no  limitation 
whatever  to  the  issue  of  an  indefinite  amount  of  paper 
money  under  the  convertible  note  system. 

Under  our  national  bank  organization,  the  issue  of  addi- 
tional notes  must  be  preceded  by  a  deposit  of  additional 
bonds  for  security  of  the  notes.  But  as  these  deposited 
bonds  draw  interest,  this  plan,  while  it  affords  another  bar- 
rier against  an  undue  increase  of  the  circulating  medium, 
presents  nothing  which  obviates  the  chief  objection  to  this 
mode  of  limiting  and  regulating  the  amount  of  paper 
money ;  viz.,  the  diversity  of  self-interest  between  those 
who  issue  paper  money  and  the  public. 

HOW   BANKERS   EVADE   THEIR    PROMISES. 

A  convertible  bank-note  is  a  promise  on  the  part  of  the 
bank  to  pay  its  face  value  in  specie  on  demand.  How  is 
this  promise  fulfilled  whenever  an  active  demand  for  coin 
exists  ? 

The  banks,  knowing  that  their  issue  of  paper  money  is 
greater  than  the  amount  of  their  coin,  and  fearing  to  trust 
either  one  another  or  the  people,  adopt  what  seems  the 
safest  course  for  their  own  protection,  without  any  regard 
whatever  for  the  interests  of  the  public.  They  receive  in 
payment  their  own  notes  as  fast  as  current  payments  re- 
turn them,  and  refuse  to  re-issue  them  for  new  discounts. 
This  rapidly  contracts  the  volume  of  the  currency,  increases 
the  rate  of  interest  and  produces  such  a  sharp  demand  for 
bank-notes  with  which  to  pay  bank  debts  that  the  holders 
of  these  notes  are  more  or  less  prevented  from  demanding 


SPECIE  PA  YMENT  INFLA  TION. 


353 


their  payment  in  specie.  Instead  of  freely  paying  specie, 
according  to  the  intent  of  their  legal  and  moral  obligations, 
the  banks  resist  it  with  all  the  means  in  their  power,  and 
often  avoid  a  suspension  themselves  by  making  many  of 
their  customers  bankrupt,  simply  through  inability  to  bor- 
row money  for  which  they  had  ample  security  at  the  ordi- 
nary scale  of  prices. 

Bad  inflations  and  panics  have  repeatedly  occurred  under 
specie  payments  both  in  this  country  and  in  England.  An 
especially  destructive  panic  occurred  in  England  in  1825. 
This  was  shortly  after  she  had  resumed  "  specie  payments," 
and,  as  was  fancied,  had  placed  her  finances  on  a  stable 
basis.  The  years  1814,  1816,  1825,  1837,  1838,  1839,  ^^A7i 
1857  and  1861  are  notable  demonstrations  of  the  weakness 
of  the  convertible  note  system.  Many  who  have  not  ex- 
amined the  matter  have  imbibed  the  notion  that  England 
has  had  a  stable  currency  since  she  adopted  the  gold  stand- 
ard in  1 8 16.  But  in  fact,  no  country  has  witnessed  more 
frequent  commercial  revulsions. 

The  Bank  of  Glasgow  has  comparatively  recently  shown 
us  the  weakness  and  evils  of  the  system  called  specie  pay- 
ments ;  it  has  practically  demonstrated  that  the  amount  of 
paper  money  in  circulation  needs  more  ef^cient  and  certain 
means  of  regulation. 

THE   CHIEF   EVIL   OF   SPECIE   PAYMENTS. 

The  radical  evil  of  so-called  "  specie  payments  "  is,  that 
under  it  the  amount  of  money  in  circulation,  and,  conse- 
quently, the  average  scale  of  prices  are  placed  in  the  hands 
of  a  comparatively  few  bank  officers.  By  means  of  expand- 
ing or  contracting  their  promises  to  pay,  they  can  make 
money  plenty,  or  scarce,  and  diminish  or  increase  the  rate 
of  interest  whenever  their  imagined  self-interest  prompts 
them  to  unite  for  a  common  purpose.  Thus  the  power  to 
change  the  meaning  of  the  vast  number  of  outstanding  con- 
tracts, in  form  of  debts,  is  practically  placed  in  the  hands 
of  men  whose  conduct  is  guided,  not  with  reference  to  the 
23 


354 


SOCIAL  STRUGGLES. 


welfare  of  the  nation,  but  almost  entirely  with  regard  to 
theii*  own  narrow  interests,  as  they  see  them. 

WHAT   OCCURRED   IN    1 857. 

When  the  panic  of  1857  began,  the  New  York  banks  had 
in  their  vaults  less  than  twelve  millions  of  specie,  and  to  re- 
tain this  they  made  a  desperate  struggle.  They  kept  up  a 
steady  contraction  of  bank  facilities  at  the  rate  of  a  million 
dollars  a  day  for  sixty-six  days.  The  rate  of  interest  rose 
from  eight  to  thirty-six  per  cent,  per  annum.  Property 
shrunk  enormously  in  value,  and  swift  and  widely-spread 
bankruptcy  ensued.  But  even  this  severe  blow  at  the  peo- 
ple did  not  enable  the  banks  to  retain  their  coin.  About 
the  middle  of  October,  four  millions  of  specie  were  with- 
drawn and  the  banks  suspended  payment.  The  attempt  to 
retain  twelve  millions  of  coin  in  the  banks  cost  the  nation, 
by  stoppage  of  industrial  enterprises,  sudden  derangement  of 
business  and  loss  of  production  by  unemployed  labor,  at 
least  one  hundred  millions,  and  careful  writers  have  esti- 
mated the  loss  at  three  hundred  millions  of  dollars. 

The  action  of  the  banks  in  1857  is  not  an  exceptional 
one.  The  system  of  allowing  bankers  to  issue  promises 
which  will  be  used  as  money,  as  long  as  times  go  on 
smoothly,  and  be  generally  presented  for  redemption  in 
legal  tender  only  when  the  business  world  gets  alarmed, 
places  such  persons  in  a  position  of  antagonism  to  the 
public.  Self-interest  prompts  them  to  unduly  contract 
their  issues  just  at  the  time  when  such  a  course  will  greatly 
aggravate  the  existing  troubles. 

Having  found  that  a  bankers'  mode  of  doing  so  will  nat- 
urally and  inevitably  be  adverse  to  the  public  welfare,  we 
are  warranted  in  concluding  that  the  issue  of  money  is  not 
a  proper  function  for  a  bank  to  perform.  The  chief  object 
of  governrnent  should  be  to  so  organize  society  that  one 
class  of  persons  will  not  have  it  in  their  power,  without 
violating  laws  and  subjecting  themselves  to  severe  penal- 
ties, to  inflict  great  injuries  on  the  rest  of  the  community. 


WHA  r  LEGITIMA  TE  BANKING  IS. 


WHAT   EXPERIENCE    HAS     SHOWN. 


355 


The  world's  experience  has  slowly  but  fully  shown  that 
the  performance  of  any  function  or  duty  whatsoever,  in 
which  the  selfish  interests  of  those  who  perform  it  are 
often  necessarily  the  opposite  of  the  public  good,  should 
not  be  placed  in  the  hands  either  of  individuals  or  corpora- 
tions. The  people's  interests  should  be  in  the  hands  of 
persons  who  are  employed  by  the  people,  and  are  surrounded 
with  such  checks  as  to  make  their  selfish  interests  identical 
with  those  of  the  nation.  Many  things  which  were  once  in 
private  hands  have  during  the  past  century  been  taken 
charge  of  by  the  public.  Who  but  a  few  persons  that 
might  make  money  out  of  it,  would  wish  to  see  the  carriage 
of  letters  taken  from  the  Government  and  restored  to  pri- 
vate hands  ?  Formerly  a  considerable  number  of  persons 
in  every  country  were  allowed  to  have  private  mints  and 
issue  metallic  money.  But  this  function  has  been  taken 
charge  of  entirely  by  the  sovereign  power,  and  its 
advantages  so  clearly  demonstrated  that  scarcely  any  one 
now  thinks  of  a  private  mint.  This  has  occurred  because 
the  selfish  interests  of  private  individuals  or  corporations 
are  so  often  not  in  unison  with  the  public  welfare. 

LEGITIMATE    BANKING. 

Legitimate  banking  consists  of  the  purchase  and  sale  of 
bills  of  exchange,  the  reception  of  deposits  and  the  mak- 
ing of  discounts,  both  with  their  own  money  and  with  a 
portion  of  the  deposits.  This  is  a  proper  and  useful  bus- 
iness for  all  parties  concerned. 

Our  national  banking  system  cannot  be  properly  called 
"  good,"  because  it  is  based  on  a  false  principle.  That  it 
is  better  than  State  banks  is  not  a  sufficient  reason  for  its 
existence.  Measles  are  not  as  bad  as  small-pox  but  measles 
are  not  therefore  desirable.  National  banks,  although  bet- 
ter than  State  banks,  are  not  as  good  as  no  banks  of  issue 
whatever.     The  real  question  should  not  be  evaded. 


356  SOCIAL  STRUGGLES. 

NATIONAL   BANKS    HAVE    SPECIAL   PRIVILEGES. 

National  banks  are  associations  who  receive  special  privi- 
leges from  the  Government.  These  privileges  consist  in 
the  right  to  draw  interest  on  their  debts.  Ordinary  persons 
pay  interest  on  their  notes.  The  national  banks  draiv  in- 
terest on  their  notes. 

Bank-notes  are  not  as  good  as  greenbacks.  They  are  not 
a  legal  tender  between  individuals.  The  bank-notes  are 
redeemable  in  greenbacks,  thus  showing  on  their  face  that 
they  are  inferior  to  greenbacks  ;  for  why  should  a  supe- 
rior money  be  "redeemed"  in  an  inferior  money?  Much 
has  been  said  to  show  that  greenbacks  cannot  be  money 
because  they  are  a  debt.  Every  national  bank-note  is  a 
debt  ;  it  bears  on  its  face  the  inscription  :  "  The Na- 
tional Bank  promises  to  pay."  This  promise  is  to  pay  in 
greenbacks.  It  is  said  that  as  greenbacks  are  a  debt,  they 
should  be  burned  as  soon  as  paid,  because  a  paid  note 
should  be  canceled.  But  those  who  propose  this  forget 
that,  logically,  every  bank-note  in  like  manner  should  be 
burned  as  soon  as  redeemed.  This  would  soon  leave  us 
without  any  paper  money  at  all, — a  condition  which  no 
one  advocates. 

Attorneys  of  the  national  banks  have  had  the  assurance 
to  state  that  holders  of  national  bank-notes  have  greater 
security  than  holders  of  greenbacks,  because  the  greenbacks 
might  be  repudiated  ;  whereas  the  bank-notes  are  secured 
by  United  States  bonds.  It  is  true  that  the  United  States 
could  repudiate  the  greenbacks.  But  it  is  also  true  that 
they  could  repudiate  the  bonds.  As  national  bank-notes 
are  redeemable  in  greenbacks,  it  follows  that  if  greenbacks 
become  worthless,  the  bank-notes  will  then  be  redeemable 
in  worthless  greenbacks. 

The  greenbacks  are  secured  by  the  faith  of  the  people  of 
the  United  States  which  is  pledged  to  receive  them  as  a 
legal  tender  in  payment  of  taxes,  and  as  a  legal  tender  in 
payment  of  debts.  Their  value  is  also  secured  by  their 
limitation  in  amount,  and  by  the  people's  willingness  to  use 


UNFAIRNESS  OF  NATIONAL  BANKS.  357 

them  as  a  medium  of  exchange.  The  greenbacks  bear  no 
interest — hence  their  use  has  reheved  the  people  of  taxa- 
tion for  that  purpose.  Had  no  national  bank-notes  ever 
been  printed,  we  could  have  issued  more  greenbacks  and 
avoided  issuing  over  three  hundred  millions  of  interest- 
bearing  bonds. 

Considerable  ink  has  been  used  in  showing  the  dangers 
of  too  many  greenbacks.  A  national  bank-note  "inflates" 
as  much  as  a  greenback.  But  we  do  not  hear  lamentations 
over  the  amount  of  bank-notes  ! !  The  national  bank-notes 
are  printed  at  the  expense  of  the  United  States  Govern- 
ment. 

NATIONAL    BANKS   ARE   UNFAIR   MONOPOLIES. 

How  can  national  banks  be  justly  called  monopolies  when 
all  persons  are  free  to  start  national  banks,  and  every  one  is 
at  liberty  to  buy  national  bank  stock? 

Because  the  national  banking  law  is  a  gift  of  the  public 
credit ;  a  gift  of  the  use  of  the  public  necessity  for  paper 
money  [which  is  public  property]  to  the  few  persons  who 
are  in  a  situation  to  accept  such  gift  and  make  it  profitable. 
It  is  misleading  to  say  there  is  universal  liberty  to  own  na- 
tional bank  stock, — necessity  prevents  all  but  a  compara- 
tively few  persons  from  owning  bank  stock.  For  example, 
we  have  a  Green  in  the  center  of  this  city.  Every  citizen 
owns  a  portion  of  that  land, — it  is  public  property  intended 
for  the  use  of  all.  Suppose  the  city  authorities  should  say  : 
"Any  citizen  can  have  a  building  lot  on  the  Green,  free  of 
charge,  provided,  he  build  thereon  a  house  worth  $20,000. 
If  this  were,  and  could  be  legally  done,  a  few  men  could 
thus  get  a  lot  for  nothing ;  the  Green  would  be  taken  up 
for  building  purposes  to  the  detriment,  and  at  the  expense 
of  the  great  majority  who  were  unable  to  build  such  an  ex- 
pensive house.  Is  it  not  clear  that  the  few  persons  who 
should  thus  appropriate  the  Green  would  be  monopolists  ? 
Under  legal  forms,  by  virtue  of  their  wealth,  they  would  be 
taking  an  unfair  advantage  of  the  public,  and  appropriating 


358 


SOCIAL  STRUGGLES. 


to  their  own  use  public  property  without  giving  an  equitable 
consideration  therefor. 

The  above  supposed  case  would  be  a  monopoly  similar  to 
the  national  banking  system.  While  all  citizens  are  nommally 
free  to  engage  in  the  issue  of  paper  money,  according  to  the 
provisions  of  the  national  banking  act,  yet  only  a  few  can 
acUtally  do  so. 

The  majority  are  obliged  to  keep  all  their  means  invested 
in  a  farm  or  a  homestead  ;  or  in  the  animals,  buildings, 
machinery,  or  merchandise  necessary  to  carry  on  their  bus- 
iness. They  have  no  surplus  to  invest  in  bank  stock,  hence 
they  lose  their  portion  of  the  value  of  the  right  to  issue 
paper  money,  and  are  subject  to  increased  taxation  in  order 
that  those  who  are  able  to  buy  bank  stock  may  get  the 
benefit  of  borrowing  money  of  the  Government  at  one  per 
cent,  per  annum.  Government  should  be  as  simple  and 
cheap  as  possible,  and  a  great  step  in  that  direction  would  be 
taken  by  wiping  out  the  whole  machinery  of  officers  and 
means  whereby  bank-notes  are  distributed  to  banks  and  the 
one  per  cent,  tax  collected  thereon.  Instead  of  handing 
notes  over  to  the  banks  after  certain  formalities,  and  then 
paying  men  to  watch  the  banks  and  collect  its  dues,  the  Gov. 
ernment  should  issue  all  the  paper  money  directly. 

The  issue  of  paper  money  by  individuals  and  corporations 
is  an  old  usage,  but  an  abuse  or  a  wrong  is  never  made  right 
by  the  length  of  time  it  has  been  committed. 

A  persistent  attempt  has  been  unfairly  made  to  justify 
the  special  privileges  of  the  banks,  by  the  plea  that  they 
pay  such  a  large  sum  annually  in  form  of  taxes.  Suppose 
the  farmers  or  the  manufacturers  should  compute  the  an- 
nual amount  of  tax  which  they  pay,  and  then  say  to  the 
Government :  "  We  pay  so  much  tax ;  therefore,  you  should 
lend  us  money  at  one  per  cent,  per  annum."  This  would 
be  no  more  absurd  than  the  plea  of  the  banks. 

THE   FLOW   OF   COIN. 

The  advocates  of  specie  payments  tell  us  that  under 
such  a  system  the  amount  of  money  in  a  country  is  properly 


THE  TENDENCY  OF  MONEY. 


359 


regulated  by  the  automatic  export  and  import  of  coin  ;  that 
when  there  is  too  much  coin,  prices  are  so  high  that  mer- 
chants export  coin  instead  of  commodities  ;  that  when 
there  is  a  scarcity  of  coin,  prices  are  so  low  that  foreign 
merchants  send  in  coin  instead  of  commodities ;  that  this  flow 
of  coin  soon  restores  an  equilibrium  of  prices  thoughout  the 
commercial  world,  and  also  supplies  each  country  with  just 
the  amount  of  coin  it  needs ;  and,  as  convertible  paper 
money  is  based  on  coin,  therefore  specie  payments  provides 
every  nation  with  its  proper  amount  of  money. 

This  statement  is  not  true  unless  made  subject  to  several 
limitations.  It  is  more  correct  to  say  that  under  specie  pay- 
ments there  is  a  tendency  for  coin  to  ebb  and  flow  as  above 
stated,  but  that  this  tendency  is  often  so  antagonized  by 
other  forces  as  to  produce  comparatively  but  little  effect. 
Sometimes  these  opposing  tendencies  cause  the  flow  of  coin 
to  cease  entirely,  and  sometimes  they  retard  it  so  that  it 
produces  but  little  practical  effect  on  commerce  and  prices 
for  a  considerable  period  of  time. 

All  conditions  are  the  resultant  of  two  or  more  opposing 
forces  which  balance  each  other.  Perhaps  it  would  be  more 
accurate  to  say  that  every  occurrence — every  natural  phenom- 
enon, or  fact,  is  an  indication  of  the  result  of  a  conflict  which 
is  taking,  or  has  taken  place  between  two  or  more  causes 
acting  as  opposing  forces,  in  different  directions.  For  exam- 
ple, in  obedience  to  the  law  of  gravitation,  there  is  a  ten- 
dency for  the  moon  to  fall  to  the  earth.  Its  centrifugal 
force  has  a  tendency  to  project  it  into  space  away  from  the 
earth.  The  two  forces  are  so  balanced  that  the  moon  circles 
around  us.  Tendencies  frequently  have  no  effect  whatever. 
There  is  a  tendency  for  wind  to  blow  down  houses,  but  ordi- 
narily it  is  not  strong  enough  to  overcome  the  inertia  and  re- 
sistance of  the  building,  hence  no  effect  is  produced.  Before 
a  tendency  can  become  effectual,  it  must  be  powerful  enough 
to  overcome  or  modify  the  existing  conditions  ;  and,  in  ad- 
dition to  that,  it  often  needs  to  be  strong  enough  to  over- 
come new  resistance  and  new  opposing  tendencies  which  its 
action  has  evoked. 


360 


SOCIAL  STRUGGLES. 


Money  ordinarily  commands  about  twice  as  high  a  rate  of 
interest  at  St.  Paul,  Minnesota,  as  it  does  in  New  York  City. 
There  is  therefore  a  tendency  for  money  to  flow  from  New 
York  to  St.  Paul  until  an  equilibrium  be  reached.  Money  re- 
mains permanently,  and  apparently  disproportionately,  high 
in  St.  Paul,  because  the  tendency  to  a  level  between  its  price 
there  and  in  New  York  is  opposed  by  another  tendency,  viz., 
the  tendency  of  the  money-lenders  to  keep  their  money 
close  at  home.  The  rate  of  interest  is  much  higher  in 
New  York  than  in  Amsterdam,  Holland.  This  creates  a 
tendency  for  Amsterdam  capitalists  to  send  their  funds  to 
New  York.  This  they  do  to  a  limited  extent;  nevertheless, 
the  rate  of  interest  between  those  places  remains  different. 
The  natural  desire  of  capitalists  to  invest  their  funds  within 
easy  reach  is  strengthened  by  the  fact  that  in  places  where 
money  commands  a  high  rate  of  interest  it  is  ordinarily  much 
more  difficult,  and  often  impossible,  to  securely  loan  large 
amounts  of  money  in  single  sums. 

RESULTS   OF   DRAINING   AWAY   MONEY. 

In  a  country  with  a  contracted  currency,  prices  of  com- 
modities are  too  low  and  remain  so  until  the  proper 
increase  of  money  occur.  Theoretically,  it  is  easy  to  see 
how  such  a  nation  can  speedily  supply  itself  with  coin.  It 
has  only  to  stop  all  imports,  except  those  of  coin,  and  to 
export  its  cheap  commodities  in  exchange  for  coin.  But, 
practically,  there  are  a  host  of  obstacles  which  make  such 
an  undertaking  a  slow  and  difficult  one.  While  these  obsta- 
cles are  being  overcome,  the  value  of  property  in  that  coun- 
try is  lowered  by  reason  of  forcible,  arbitrary  changes  in  the 
conditions  under  which  it  is  placed  ;  debtors  are  despoiled 
for  the  benefit  of  creditors. 

The  actual  and  threatened  contraction  of  the  currency  in 
this  country  which  occurred  after  1873,  lowered  the  prices 
of  our  farm  produce  so  that  America  was  the  cheapest  coun- 
try for  foreign  nations  to  buy  in.  But  several  things  pre- 
cluded us  from  getting  a  speedy  supply  of  coin  from  sales  of 
farm  products.     A  fall  in  the  price  of  wheat  in  America  has 


RESULT  OF  LOWERING  PRICES  SUDDENLY. 


361 


a  tendency  to  immediately  depress  prices  of  grain  all  over 
the  world.  This  tends  to  create  instant  competition,  at  low 
rates,  by  other  nations. 

The  amount  and  value  of  the  articles  available  for  export 
in  a  country  are  always  very  small  compared  with  the  total 
wealth  and  business  of  that  country.  This  is  especially  true 
in  regard  to  a  nation  like  the  United  States,  which  has  a  rel- 
atively smaller  amount  of  personal,  and  more  real  property, 
than  an  old  country  like  England. 

A  general  lowering  of  the  scale  of  prices  produces  finan- 
cial disturbance  and  depression  of  business.  Whenever  this 
occurs  in  one  country,  it  has  a  tendency  to  disturb  the  in- 
dustries of  the  nations  with  whom  such  country  has  a  con- 
siderable trade.  If  one  country  cease  to  import  goods,  the 
country  from  whom  they  were  formerly  bought  has  less  abil- 
ity to  consume  and  pay  for  commodities  taken  in  exchange. 

The  amount  of  coin  that  any  country  can  spare  without 
financial  disturbance  is  relatively  very  small,  provided  the 
nation  losing  its  coin  have  what  is  called  specie  payments. 
When  that  small  amount  has  been  taken,  the  balance  of  the 
sum  called  for  by  foreign  creditors,  or  trade,  is  paid  either 
by  commodities,  by  giving  evidences  of  debt  of  the  purchas- 
ing nation,  or  by  returning  the  bonds  of  the  selling  nation. 
The  latter  has  recently  taken  place,  to  some  extent,  to  settle 
balances  between  America  and  England. 

Importations  can  be  diminished,  but  a  cessation,  even  if 
possible,  would  produce  great  commercial  distress.  Some 
importations  supply  habitual  comforts  and  luxuries,  the  ab- 
sence of  which  would  produce  much  popular  discontent  ; 
while  other  importations  are  the  raw  materials  without 
which  the  creation  of  wealth  in  various  forms  would  be 
seriously  diminished. 

Massachusetts  printed  her  first  paper  money  in  1692. 
For  fifty  years  before  that  time  money  was  so  scarce  in  that 
colony  that  cattle  and  grain  were  used  and  made  a  legal 
tender  for  taxes.  During  that  period  there  was  undoubted- 
ly a  tendency  for  coin  to  "  flow  "  into  Massachusetts,  but 
other  and  stronger  tendencies  kept  it  out,  except  to  a  very 


362 


SOCIAL  STRUGGLES. 


limited  extent.  The  chief  of  these  tendencies  was  the  fact 
that  the  people  were  so  poor  that  they  did  not  feel  able  to 
afford  the  expense  of  gold  or  silver  money.  Capital  was  so 
deficient,  in  comparison  to  the  demand  for  it,  that  it  was 
more  profitable  to  keep  it  invested  in  other  forms  and  dis- 
pense with  metallic  money. 

A   UNIVERSAL   NATURAL   LAW. 

This  was  simply  an  exemplification  of  the  fact  that  when- 
ever an  individual,  a  community,  or  a  nation  is  hard  pressed 
in  the  struggle  for  existence,  no  matter  what  form  that 
struggle  may  take,  the  things  apparently  least  vitally  nec- 
essary to  carry  on  the  warfare  are  naturally  dropped  first. 
Metallic  money  is  a  form  of  capital  for  which  substitutes  can 
be  found  more  easily  than  for  some  other  kinds  of  capital. 
Hence,  a  nation  engaged  in  a  war,  so  desperate  that  every- 
thing must  be  used  with  the  greatest  effect,  always 
exchanges  its  metallic  money  for  other  forms  of  capital. 

A  country,  as  was  the  case  with  England  in  1839,  "^"^Y 
be  rapidly  drained  of  its  metallic  money,  because  several 
nations  simultaneously  draw  it  away.  But  when  once  lost, 
its  recovery  is  a  slow  and  painful  process,  during  which 
time  real  estate  and  other  non-exportable  things  are  at  a 
disadvantage  and  sink  to  a  very  low  price.  At  the  same 
time  great  financial  embarrassment  exists  among  business 
men,  especially  among  those  whose  capital  is  more  or  less 
borrowed,  and  this  creates  suffering  among  the  laboring 
classes.  A  nation,  under  such  circumstances,  is  in  a  condi- 
tion similar  to  that  of  a  man  forced  to  raise  money  by  sell- 
ing his  property  at  auction. 

We  are  frequently  told  that  a  dollar  is  really  worthless 
unless  it  is  as  valuable  in  foreign  countries  as  in  our  own 
country.  ^  But  persons  who  talk  so  might  as  well  say  that  the 
laws  of  the  State  of  New  York  are  worthless  because  they  are 
of  no  validity  in  South  America  or  Asia.  American  laws, 
American  schools  and  American  money  should  be  created 
for  the  best  good  of  American  citizens,  without  having  spe- 
cial reference  to  the  Hindoos,  the  Russians,  or  the  Turks.    It 


THE  IDEAL  DOLLAR.  363 

is  not  desirable  to  have  the  bulk  of  our  national  money 
made  of  materials  that  are  liable  to  be  affected  in  value  by- 
commercial  disturbances  in  other  countries. 

WHAT   WE   SHOULD   ATTEMPT. 

We  need  to  secure  the  greatest  attainable  stability  in  the 
value  of  our  money.  The  ideal  dollar  never  changes  in 
value.  To  effect  this,  we  should,  as  far  as  possible,  shut' 
off  possible  causes  of  fluctuation. 

In  1866  commercial  failures  for  enormous  amounts 
occurred  in  England  and  created  a  panic  in  that  country. 
Had  our  currency  been  composed  chiefly  of  gold  we  should 
then  have  been  immediately  involved  in  similar  trouble. 
Owing  to  the  fact  that  gold  formed  only  a  small  fraction  of 
our  money  at  that  time,  this  financial  storm  in  London  did 
not  materially  disturb  business  in  New  York. 

A  uniform  steadiness  in  industrial  enterprises  and  pro- 
ductive business  of  all  kinds  would  be  promoted  by  having 
the  capital  whose  special  function  is  to  exchange  and  dis- 
tribute wealth  put  in  such  form  as  to  be  free  from  danger 
of  exportation.  What  would  be  thought  of  the  sagacity  of 
a  machinist  who  should  have  the  tools  of  his  shop  placed 
under  the  control  of  parties  in  London,  Paris  or  Amster- 
dam? The  money  used  by  the  American  people  bears  the 
same  relation  to  the  industries  of  this  country  that  a 
machinist's  tools  do  to  the  workmen  in  his  employ.  Just 
in  proportion  as  the  tools  are  disturbed  or  taken  away,  the 
business  of  that  shop  is  deranged.  Just  in  proportion  as 
the  instrument  of  commerce,  called  '*  money,"  is  disturbed 
or  taken  away,  the  industries  of  the  country  from  which  it 
is  taken  are  deranged. 

THE   END   TOWARD   W^HICH   WE   ARE  TRAVELING. 

We  have  heretofore  found  that  the  history  of  the  devel- 
opment of  the  art  of  commerce  shows  a  steady  and  irre- 
sistible tendency  toward  the  final  entire  disuse  of  both 
gold  and  silver  as  money.  We  have  nearly  reached  that 
point.     The  best  authorities  estimate  that  only  about  one- 


3^4 


SOCIAL  STRUGGLES. 


half  of  one  per  cent,  of  the  total  exchanges  made  in  Lon- 
don are  effected  by  the  use  of  metallic  money.  The  rest 
are  made  with  paper. 

But  nearly  reaching  a  point  and  getting  there  are  two 
different  things.  We  are  traveling  inevitably  toward  the 
exclusive  use  of  paper  money  but  have  not  yet  reached  that 
point.  Except  as  they  may  be  educational  means,  our 
progress  in  that  direction  cannot  be  hastened  by  special 
measures,  because  it  depends  on,  and  must  keep  pace  with 
the  slow  growth  of  intelligence  in  all  other  respects.  Even 
if  we  could,  if  would  not  be  wise  to  make  undue  haste 
because  a  metallic  currency  is  the  best,  unless  a  nation  has 
risen  to  a  sufificient  height  of  intelligence  and  morality  to 
wisely  use  a  better  one  ;  just  as  a  strong  despotism  is  best 
adapted  to  a  people  incapable  of  self-government,  and  of 
enjoying  the  blessings  of  liberty  without  falling  into 
anarchy. 

In  all  probability,  the  United  States  are  nearly  ready  to 
take  two  important  steps.  First.  A  removal  of  the  present 
limitation  of  the  coinage  of  silver,  and  consequently,  of  the 
limitation  of  the  issue  of  silver  certificates.  Second.  The 
entire  abolition  of  national  bank-notes,  and  the  issue  of 
the  same  amount  of  greenbacks  to  take  their  place. 

After  the  above  measures  have  been  a  few  years  in  force, 
the  next  step  will  be  the  adoption  of  some  more  efificient 
and  reliable  mode  of  regulating  the  amount  of  paper 
money  than  by  its  redemption  in  coin.  The  final  measure 
will  be  the  transaction  of  all  business  without  metallic 
money. 

How  long  time  will  elapse  before  the  aforesaid  events 
will  happen  no  one -can  tell.  But  their  occurrence  is  just  as 
certain  as  the  further  development  of  the  intelligence  of 
the  American  people. 


CHAPTER  XV. 

Franchises.— What  a  Patent  is. — Patents  may  be  used  to  plunder  the 
Community. — What  a  Franchise  is. — What  a  Railroad  Franchise 
is. — Watered  Stocks. 

TJie  people  liave  JiitJierto  given  azv ay  valuable  francJiises. 
In  the  future,  they  zvill  retain  the  oivnersJiip  of  all  franchises 
and  either  use  them  directly  or  give  leases  subject  to  constant 
right  of  revision  or  cancellation. 

Through  their  agents,  the  members  of  State  Legislatures, 
the  people  annually  vote  away  a  considerable  number  of 
franchises.  Most  of  these  franchises  are  given  without  the 
people,  to  whom  they  really  belong,  being  fully  aware  of 
the  real  nature  of  the  transaction  which  then  takes  place. 
As  some  franchises  are  very  valuable  it  behooves  every 
voter  to  inform  himself  on  this  subject  in  order  to  guard 
his  property  from  spoliation.  A  striking  illustration  of  the 
necessity  of  this  occurred  a  few  years  ago  in  this  city.  The 
voters  actually  cast  a  majority  of  ballots  in  favor  of  giving 
away,  without  consideration,  a  franchise  for  supplying  New 
Haven  with  water  which  carried  with  it  ownership  and  con- 
trol of  all  the  available  water  supply.  On  the  day  that  vote 
was  cast,  said  franchise  was  worth  five  hundred  thousand 
dollars ;  and  it  is  now  worth  much  more  than  that  sum. 
This  happened  in  a  city  which  fancies  itself  possessed  of 
superior  education  and  intelligence. 

WHAT   A   PATENT   IS. 

A  patent  is  an  exclusive  right  to  manufacture,  sell,  and 
use  a  certain  thing.  Patents  are  usually  granted  for  only  a 
few  years,  after  which  the  special  right  of  manufacture  and 
sale  is  gone,  and  every  one  is  at  liberty  to  make  and  use 
what  was  previously  protected  by  the  patent  law.  A  large 
amount  of  money  is  yearly  spent  in  inventing  things  which 
can  be  patented,  because  the  exclusive  privilege  of  making 

365 


366 


SOCIAL  STRUGGLES. 


and  selling  a  thing,  especially  if  it  be  something  which 
many  persons  want,  often  brings  a  large  income  to  its  pos- 
sessor. This  is  so  chiefly  because  no  one  can  enter  into 
competition  with  those  working  under  authority  of  the  pat- 
ent while  it  is  in  force.  No  matter  how  unreasonably  high 
the  price  of  the  patented  article  may  be,  nor  how  large  the 
profits  of  those  who  make  it,  no  one  has  a  legal  right  to 
make  a  similar  thing  himself,  even  though  it  could  be  made 
for  one-tenth  part  of  its  selling  price.  This  removes  those 
owning  the  patent  from  danger  of  others  making  the  pat- 
ented article  and  selling  it  at  a  reasonable  profit. 

PATENTS    MAY,    BE    USED    TO    PLUNDER   THE   COMMUNITY. 

An  invention  which  saves  labor  is  an  addition  to  the 
wealth  of  mankind,  because  by  its  use  more  wealth  can  be 
produced  with  the  same  amount  of  labor  than  with  the 
means  previously  employed.  But  during  the  time  for 
which  the  patent  be  granted,  its  owner  can  force  the  public 
to  give  to  him  a  considerable  portion  of  the  wealth  created 
by  using  the  patented  article.  After  the  patent  expires, 
the  whole  community  shares  the  benefit  of  the  invention. 
For  example,  sewing  machines  and  machines  for  cutting 
grass  and  grain  sold  at  exorbitant  prices  until  their  patents 
expired.  Such  machines  can  now  be  had  for  one-half  or 
one-quarter  the  price  once  charged. 

WHAT  A  FRANCHISE   IS. 

A  franchise  resembles  a  patent.  It  is  a  particular  and 
special  right  or  privilege  granted  by  the  Legislature  to  one 
or  more  persons  to  use,  enjoy,  and  make  profit  from  a  cer- 
tain property  or  thing.  It  usually  differs  from  what  we  call 
"  a  patent "  in  this :  It  is  granted  forever  and  not  for  a 
few  years  only.  A  franchise,  therefore,  is  not  a  patent 
which  will  end  in  seventeen  years  and  thus  thereafter  let 
the  whole  people  share  its  profits  and  benefits.  It  is  a  pat- 
ent for  all  future  time.  When  a  city  gives  a  water  com- 
pany the  franchise  of  distributing  water  and  collecting  a 
water  rate,  it  gives  a  perpetual  patent  to  sell  a  prime  neces- 


A  FREQUENT  FOLLY.  367 

sary  of  life.  This  folly  will  be  less  frequently  committed 
when  the  nature  of  a  franchise  is  more  generally  known. 

Suppose  a  merchant  could  now,  as  in  the  middle  ages, 
get  the  exclusive  privilege  of  making,  or  selling  cloth  in  a 
certain  city.  Then  no  other  manufactory  or  store  could  be 
opened  in  that  city  without  his  consent.  Even  if  his  prices 
were  not  extravagant,  such  an  exclusive  privilege  would  be 
valuable  because  it  would  prevent  competition  at  lower 
prices.  Such  an  exclusive  right  would  be  a  franchise  for 
making  or  selling  cloth. 

The  world  has  largely  outgrown  the  practice  of  giving 
such  franchises  as  the  aforesaid.  Formerly  every  business 
or  trade  which  could  readily  be  made  the  subject  of  a  fran- 
chise was  sold  or  given  to  a  few  individuals.  It  seems 
strange  to  us  now,  to  think  of  a  man  having  a  franchise 
which  gave  him  the  exclusive  right  to  grind  grain  into  flour 
in  a  certain  neighborhood.  But  it  is  only  a  comparatively 
short  time  since  nearly  every  important  occupation  was 
made  the  subject  of  a  franchise. 

Franchises  are  now  restricted  to  a  comparatively  few 
things.  A  few  bankers  still  retain  the  franchise  of  issuing 
paper  money.  A  few  cities  grant  franchises  to  companies 
for  the  purpose  of  bringing  water  into  those  cities  and  sel- 
ling it.  But  the  great  majority  of  franchises  are  now  given 
to  railroad,  steam-boat,  horse-car,  and  other  transportation 
companies. 

When  a  franchise  is  given  to  build  a  railroad,  the  owners 
of  that  franchise  have  not  only  the  right  to  prevent  anyone 
else  from  building  a  road  on  the  designated  route,  but 
they  also  have  a  legal  right  to  take  the.  property  of  any  one 
they  choose  in  the  way  of  their  road.  It  is  true,  they  are 
required  to  pay  for  the  property  so  taken,  but  this  payment 
is  often  inadequate  compensation. 

WHAT   A   RAILROAD    FRANCHISE   IS. 

Railroad  franchises,  in  many  cases,  are  very  valuable. 
Practically,  they  are  a  perpetual  patent  on  one  of  the  great- 
est   inventions   of   modern    times;    viz.,  the    invention   of 


368  SOCIAL  STRUGGLES. 

building  steam  locomotives  and  laying  smooth  tracks  on 
which  to  carry  passengers  and  freight.  The  advantages  of 
this  invention  are  so  enormous  that  competition  by  other 
forms  of  land  carriage  is  practically  impossible. 

In  the  absence  of  restraining  laws,  the  owners  of  this  per- 
petual patent,  have  therefore  got  the  power  to  do  precisely 
what  the  owners  of  sewing-machine  patents  did  a  short 
time  ago  ;  viz.,  charge  exorbitant  rates  for  letting  the  public 
use  the  invention  on  which  they  hold  a  patent.  There  are 
cases  of  railroads  charging  six  dollars  per  ton  for  carrying 
grain  eighty  miles. 

WATERED   STOCK. 

Within  a  comparatively  short  time  a  new  scheme  has  been 
devised  whereby  the  public  are  made  to  pay  an  usurious 
rate  of  interest  on  the  capital  invested  in  railroads,  while 
at  the  same  time  it  appears  as  if  only  a  fair  rate  of  interest 
were  charged.  This  cunning  theft  is  accomplished  by  issu- 
ing stock  for  much  more  than  the  cost  of  the  railroad  and 
then  charging  interest  on  all  this  fictitious  stock.  To 
prevent  the  legislature  from  enacting  laws  which  will  pre- 
vent such  wholesale  robbery,  this  watered  stock  is  artfully 
sold  to  a  considerable  number  of  innocent  persons.  The 
proceeds  of  such  a  sale  are  then  used  for  originating  and 
completing  another  similar  transaction.  It  is  a  curious 
fact  that  those  who  have  grown  rich  by  such  conduct  are 
nearly  unanimously  in  favor  of  "  honest  money  "  ;  i.  c, 
money  which  can  most  readily  be  used  as  an  instrument 
for  still  further  spoliating  the  toilers  of  the  land. 

Three  facts  prominently  appear  in  regard  to  railroad 
franchises.  First.  It  is  an  imperfect  remedy  for  the  mis- 
take of  giving  them  away,  to  sanction  the  building  of  par- 
allel roads.  Experience  has  shown  this  to  be  not  only  use- 
less but  an  actual  addition  to  the  burdens  of  the  commu- 
nity. Second.  It  is  vain  to  trust  that  either  the  inherent 
honesty,  or  the  self-interest,  of  railroad  officials  will  lead 
them  to  forego  opportunities  to  illegitimately  enrich  the 
railroad  at  the  expense  of  the  public.     Such  persons  are 


THE  PEOPLE  SHOULD  OWN  FRANCHISES. 


369 


neither  better  nor  worse  than  other  individuals.  But,  as 
centuries  of  experience  have  originated  and  confirmed  the 
maxim  that  "  a  judge  should  never  sit  in  trial  of  a  case  in 
which  his  own  interests  may  influence  his  decision,"  we  are 
warranted  in  treating  railroad  officers  as  if  they  might  possi- 
bly be  led  into  temptation.  Third.  Franchises  should  be  so 
granted  as  to  insure  the  fullest  and  most  immediate  con- 
trol by  the  people.  In  all  controversies  between  the  roads 
and  the  public,  both  sides  should  be  fully  heard  by  an  im- 
partial and  intelligent  tribunal.  When  a  price  is  paid  in 
consideration  of  a  franchise,  it  should  always  be  in  form  of 
a  percentage  of  gross  receipts  instead  of  a  sum  which  is 
given  and  received  as  full  payment.  This  places  the  road 
under  better  control,  and  makes  the  public  sharers  in 
the  increased  business  created  by  the  labors  of  the 
public.  In  other  words,  the  public  should  never  part  with 
the  ownership  of  a  franchise.  When  a  disposition  is  made 
of  it,  other  than  operation  by  Government  employees,  the 
transfer  should  be  by  a  lease  which  expressly  states  the 
right  of  the  people,  at  any  time,  after  reasonable  notice,  to 
revise  its  provisions  or  terminate  it  entirely.  But  all  control 
of  public  facilities  for  transportation  by  individuals  or  cor- 
porations implies  an  imperfect  state  and  organization  of 
society. 
24 


CHAPTER   XVI. 

Interest  of  Money. — The  Rate  of  Interest  is  too  High. — Why  Men  pay 
any  Interest. — Human  Nature  is  Unchanged. — Capital  is  Neces- 
sary to  Existence. — Free  Interest. — The  Difference  between  the 
Rich  and  Poor. — Different  rates  of  Interest. 

What  proportion  of  tJie  product  of  the  union  of  labor  a7id  capi- 
tal shall  be  paid  to  labor  is  largely  determined  by  the  rate  of 
interest. 

Let  us  suppose- that  Columbus  when  he  discovered  Amer- 
ica had  found  a  sovereign  power  competent  to  contract  with 
him  for  the  Sale  of  the  entire  North  American  Continent. 
Suppose  Columbus  had  made  such  a  contract,  and  agreed  to 
pay  therefor  his  note  dated  in  1492,  for  one  hundred  dol- 
lars, drawing  six  per  cent,  interest,  compounded  semi-an- 
nually, and  due  in  the  year  1892.  If  such  a  bargain  had 
been  made,  the  successors  of  Columbus,  when  the  note 
fell  due  would  have  found  that  all  the  personal  and  real 
property  in  Mexico,  the  United  States  and  Canada  which 
has  been  created  and  made  valuable  by  the  labor  of  millions 
of  persons,  insufificient  to  pay  the  debt. 

When  we  compute  the  result  of  putting  a  large  sum  at 
interest  for  a  comparatively  sJiort  time,  we  find  it  similar  to 
putting  a  small  sum  at  interest  for  a  long  time.  If  the 
United  States  had  allowed  all  the  expenses  incurred  in  the 
late  civil  war  to  accumulate  at  six  per  cent,  compound  in- 
terest until  the  year  1900,  the  bondholders  would  then  have 
owned  all  the  property  in  the  country.  Interest  would 
have  outstripped  the  accumulated  savings  of  labor. 

THE    RATE    OF    INTEREST   IS    TOO    HIGH. 

The  foregoing  facts,  and  a  multitude  of  kindred  ones 
which  could  be  adduced,  show  that  on  the  average  the  rate 
of  interest  usually  paid  is  much  -more  than  the  average  net 

370 


HUMAN  NA  TURE. 


371 


increase  of  the  national  wealth.  In  other  words,  the  average 
rate  paid  for  the  interest  of  money  is  greater  than  the  average 
savings  of  those  ivho  horroiv  the  money.  That  is :  eapital,  on 
the  average,  gets  more  than  a  strietly  equitable  share  of  the 
product  created  by  its  nnion  ivith  labor. 

The  question  arises  :  Why  does  the  average  man  pay  a 
higher  rate  of  interest  than  he  can  afford  ?  Why  do  not  the 
natural  laws  of  trade  reduce  the  rate  of  interest  to  a  level 
with  the  earnings  of  the  money  for  the  use  of  which  it  is 
paid  ? 

WHY    MEN   PAY    ANY    INTEREST. 

A  deeper  question  lies  behind  the  foregoing.  Before  in- 
quiring why  men  pay  more  interest  than  they  can  afford  to, 
let  us  see  why  men  pay  any  interest.  Whatever  diversity 
of  opinions  may  exist  in  regard  to  some  of  the  final  con- 
clusions of  Darwin,  Huxley,  Tyndall  and  their  co-laborers, 
no  one  doubts  or  disputes  their  statement  that  the  earth 
from  the  earliest  period  to  the  present  day,  has  been  the 
theatre  of  an  unceasing  struggle  among  all  forms  of  animal 
life.  The  existence  of  every  animal  is  maintained  only  by 
a  constant  effort  to  adapt  itself  to  the  ever  changing  cir- 
cumstances by  which  it  is  surrounded, — by  unceasing  efforts 
in  self-defense  or  war  with  other  species,  and  by  continual 
struggles  with  other  animals  of  its  own  race.  What  is  true 
of  the  lower  animals  is  pre-eminently  true  of  man.  History 
is  merely  a  record  of  the  struggles  of  the  human  race  for 
existence, — it  is  the  story  of  the  efforts  of  man  to  unfold 
the  secrets  of  nature,  to  make  the  elements  his  servant  and 
not  his  master,  and  it  tells  us  what  fierce  and  unremitting 
war  has  been  waged  between  man  and  man. 

Germany  and  France  are  no  less  antagonists  to-day  than 
they  were  a  few  years  ago.  The  mode  of  contest  is  all  that 
has  changed.  England  and  France,  in  essence,  are  just  as 
truly  at  war  at  present,  as  when  Pitt  controlled  England 
and  Napoleon  ruled  France  ;  and  England  is  still  at  war 
with  the  United  States  of  America. 


372 


SOCIAL  STRUGGLES. 


Instead  of  the  rude  violence  of  physical  combat  and  open 
war,  the  arts  of  diplomacy  and  commerce  are  employed.* 

Instead  of  organizing  great  masses  of  men  for  the  purpose 
of  obtaining  mastery  by  butchery  of  their  opponents,  great 
numbers  are  now  organized  as  workmen  and  artisans ;  the 
struggle  for  supremacy  has  taken  a  commercial  and  an  in- 
dustrial form.  Each  nation,  if  it  could,  would  at  once  ob- 
tain the  ascendency  and  reduce  others  to  commercial  vas- 
salage. Between  different  parties,  families,  and  individuals, 
a  contest  for  mastery  is  always  in  progress.  A  constant 
struggle  is  made  to  secure  the  necessaries  and  luxuries  of 
life,  and  in  this  race  each  one  strives  for  his  own  personal  ad- 
vantage. There  is  a  fight  every  day  going  on  in  our  social 
and  commercial  life  which  is  just  as  earnest  as  the  feuds 
of  past  centuries  when  opposing  families,  and  individual 
enemies  sallied  forth  with  ax  and  club  to  despoil  and  con- 
quer one  another. 

HUMAN    NATURE    IS    UNCHANGED. 

Each  century  sees  mankind  more  fully  adopting  better 
and  higher  standards  of  individual  and  national  conduct. 
But  the  savagery  of  five  thousand  years  ago  continually 
crops  out.     Every  baby  is  more  or  less  a  little  barbarian. 

*  During  the  last  thirty  years,  a  subtle  and  far-reaching  influence  has  been 
silently  interwoven  with  the  policy  of  many  of  our  richest  and  most  prom- 
inent colleges.  A  desire  to  please  both  the  actual  and  possible  donors  of 
those  institutions,  and  the  rich  men  who  send  their  sons  for  education,  has 
had  a  powerful  influence  on  the  college  faculties,  none  the  less  because 
exerted  so  quietly  as  to  render  them  often  unconscious  of  its  force.  In- 
sidiously, those  institutions  have  thus  been  so  molded  that  the  tendency 
of  their  teachings,  the  general  drift  of  the  social  and  political  ideas  they 
inculcate  is  to  create  a  bias  in  the  unformed  minds  of  their  pupils  in  favor 
of  an  aristocratic  organization  of  society.  As  a  natural  accompaniment 
of  such  policy,  a  prejudice  has  been  fostered  against  all  doctrines  and  laws 
which  favor  an  equitable  distribution  of  wealth,  and  a  social  system  based 
on  democratic  principles.  The  college  atmosphere  is  permeated  with  the 
notion  that  the  laws  should  be  made  and  administered  in  the  interest  of 
the  rich,  and  that  all  dissent  from  and  criticism  of  the  financial  and  social 
policy  of  England  is  evidence  of  ignorance  and  ill  breeding. 


SELFISHiVESS  NEEDS  RESTRAINT. 


373 


Human  nature  is  unchanged.  When  we  read  about  the 
political  manceuvers  of  Cicero  two  thousand  years  ago,  we 
are  forced  to  smile  at  their  resemblance  to  the  last  presi- 
dential campaign.  At  present,  powerful  men  in  search  of 
plunder  instead  of  collecting  a  troop  of  savage  horsemen, 
as  they  would  have  done  600  years  ago,  send  a  lobby  to  a 
State  Legislature,  or  to  Congress,  to  buy  votes  either  di- 
rectly or  indirectly.  Instead  of  providing  a  lot  of  mail  and 
spears,  they  hire  writers  and  lawyers.  They  control  the 
channels  of  public  information  in  their  interest.  By  rais- 
ing delusive  cries  and  making  false  pretenses,  they  rob  the 
people  of  valuable  franchises,  procure  the  change  of  con- 
tracts by  cunning  legislation,  and  plunder  millions  of  peo- 
ple by  monopolies. 

The  change  is  merely  in  the  kind  of  weapons, — we  now 
use  the  weapons  of  sophistry,  trade  and  law — but  the  inten- 
tion to  beat,  to  outwit,  and  to  rise  above  one  another,  re- 
mains. Man's  natural  inclinations  are  unchanged — he  is 
selfish  and  he  seeks  to  gratify  his  passions  in  whatever  mode 
is  most  feasible. 

CAPITAL   IS   NECESSARY   TO   EXISTENCE. 

In  this  struggle  for  existence  every  self-supporting  man 
is  forced  to  engage.  He  may  vary  the  fierceness  and  in- 
tensity of  the  purpose  which  animates  him ;  but,  if  he 
would,  he  cannot  entirely  avoid  the  contest, — to  some  de- 
gree he  must  enter  it.  He  can  do  but  little  with  naked 
hands.  He  needs  tools,  means  and  weapons  to  carry  on  this 
unavoidable  struggle.  These  helps  are  capital.  Thus  we 
see  that  every  man,  not  already  the  owner  of  what  capital  he 
needs,  must  borrow  it  either  directly  or  indirectly.  This  ne- 
cessitates either  the  direct  or  the  indirect  payment  of  inter- 
est. Bodily  necessity  is  thus  the  ultimate  force  which  com- 
pels a  man  without  capital  to  pay  interest.  He  must  lodge 
on  some  one's  property,  and  for  this  privilege  he  must  pay 
interest  either  directly,  by  borrowing  the  money  which  is 
the  price  of  his  lodging-place,  or  indirectly,  in  form  of  rent. 
Even  if  land  could  be  had  for  nothing,  capital  would   be  re- 


374 


SOCIAL  STRUGGLES. 


quisite  to  make  it  available.  It  is  immaterial  what  the  form 
of  wealth  is  which  is  hired,  or  in  what  form  payment  of  the 
hire  is  made.  The  essential  thing  which  constitutes  inter- 
est is  the  payment  of  value  in  consideration  of  the  use  of  a 
certain  amount  of  property  for  a  given  time.  Capital  is  a 
tool  for  creating  other  capital,  and  for  'supplying  ourselves 
with  the  comforts  of  civilization.  Owing  to  the  limited 
amount  of  capital  in  the  market  for  hire,  and  the  imperious 
demand  which  is  created  by  the  sharp  conflict  for  the  nec- 
essaries and  luxuries  of  life,  there  is  an  eager  desire  to  se- 
cure it.  In  this  struggle,  the  strong  naturally  use  their 
power  to  take  advantage  of  the  weak,  and  to  force  them  to 
pay  the  highest  possible  tribute  for  the  use  of  the  means  to 


obtain  a  living. 


J-REE   INTEREST. 


Many  persons  imagine  true,  the  statement  so  frequently 
made,  that  "  in  the  absence  of  laws  the  rate  of  interest  is 
free."  A  man  is  "  free  "  to  go  without  the  comforts  and 
luxuries  of  life.  In  such  a  sense  of  "  freedom,"  the  interest 
of  money  without  legal  regulation  is  "  free."  In  fact,  men 
are  obliged  to  pay  interest,  and  a  bargain,  when  one  party 
thereto  is  under  strong  compulsion  of  some  kind,  is  apt  to 
be  most  in  favor  of  the  party  not  under  an  imperative  ne- 
cessity. 

Under  ordinary  circumstances,  with  the  help  of  money  all 
other  kinds  of  capital  can  be  obtained.  Hence,  money  is 
the  form  of  capital  which  those  who  wish  to  supply  them- 
selves with  various  tools  to  aid  their  labor  in  creating 
wealth  usually  wish  to  borrow.  When  money  is  to  loan, 
this  form  of  capital  is  virtually  offered  for  lease,  and  the 
capitalist,  knowing  that  the  amount  of  capital  for  rent  is 
limited,  and  that  there  will  always  be  a  brisk  competition 
for  it,  hires  it  only  to  the  man  who  will  pay  most  for  its  use, 
and  be  most  likely  to  return  it  at  the  expiration  of  the 
time  for  which  it  is  let.  There  are  instances  of  capitalists 
preferring  to  loan  money  to  the  persons  most  in  need  of  it. 
But  such  persons  are  exceptional  and  rare. 


COMMERCIAL   WAR. 


375 


Persons  who  are  capable,  sagacious,  industrious  and  eco- 
nomical can  use  capital  to  much  greater  profit  and  advan- 
tage than  those  who  are  weak,  ignorant,  unskillful,  lazy 
and  wasteful.  Consequently,  capital  is  worth  more  to  the 
strong  than  it  is  to  the  weak,  and  therefore  the  strong  can 
afford  to  bid  a  higher  price  for  capital  than  the  weak  can 
really  afford  to  pay.  An  intelligent,  resolute  man  can  often 
make  a  large  amount  of  money  by  hiring  capital  at  the  av- 
erage, or  even  the  highest  rate,  of  interest.  The  result  of 
these  things  is  this :  the  capitalist  wants  the  highest  attain- 
able rate  of  interest,  and  the  supply  is  so  limited  that  the 
superior  men  would  sometimes  hire  all  the  money  if  the  in- 
ferior men  did  not  offer  the  capitalist  as  much  for  it  as  their 
superiors  stand  ready  to  pay. 

A  single  individual,  a  Vanderbilt  or  a  Stewart,  may  be 
capable  of  devising  such  ingenious,  comprehensive  and  far- 
sighted  plans  for  making  money  that  he  can  successfully 
employ  all  the  capital  he  can  obtain.  Borrowers  bid 
against  each  other.  The  average  rate  of  interest  is  not 
what  capital  is  really  worth  to  the  average  man,  but  it  in- 
dicates what  capital  is  worth  to  the  few  superior  men,  and 
what  rate  the  average  man  has  been  compelled  to  pay  by 
his  necessities.  The  rate  of  interest  is  not  what  the  bor- 
■  rower  can  "  afford  "  to  pay,  but  what  the  lender  can  compel 
him  to  pay  in  hopes  of  averting  still  greater  losses  or  evils. 

In  other  words,  tJic  average  rate  of  interest  is  the  amount 
zvJiicJi  the  strong  can  compel  the  zveak,  on  the  average,  to  pay 
for  the  use  of  money. 

The  fact  that  capitalists  prefer  to  loan  money  to  those 
who  apparently  have  great  financial  ability,  tends  to  compel 
the  payment  of  a  high  rate  of  interest.  If  a  rnan  in  moder- 
ate circumstances  offer  a  savings  bank  good  security  for  a 
loan  of  three  hundred  dollars,  the  chances  are  that  he  will 
be  unsuccessful.  The  bank  officials  think  that  his  loan 
would  make  as  much  trouble  as  a  larger  loan.  They  gener- 
ally j^y.-  "  Money  is  tight ;  we  have  none  for  you."  The 
borrower  is  consequently  often  obliged  to  pay  a  bonus  to 
an  individual  in  order  to   obtain  a  loan.     But  suppose  an 


17^ 


SOCIAL  STRUGGLES. 


able,  wealthy  financier  should  enter  the  same  bank,  immedi- 
ately afterward,  and  should  ask  for  a  loan  of  $25,000.  The 
reply  would  probably  be  :  "  Yes,  sir,  we  are  always  happy  to 
accommodate  you." 

THE   DIFFERENCE   BETWEEN   THE   RICH   AND   POOR. 

Many  persons  suppose  that  the  difference  between  the 
rich  and  the  poor  is  due  solely  to  the  superior  industry  and 
economy  of  the  rich.  This  is  sometimes  a  partial  explana- 
tion, but  in  a  vast  number  of  cases  it  has  no  application 
whatever.  The  fact  is  that  those  who  are  rich  by  their 
own  acts,  are  in  a  variety  of  ways  stronger  and  more  cunning 
than  the  poor,  and  this  gives  them  far  greater  power  both 
of  combining  with  one  another  and  of  controlling  natural 
things  for  their  own  advantage.  Moreover  the  rich,  espe- 
cially the-  very  rich,  are  usually  not  only  more  avaricious 
than  the  poor,  and  persons  in  moderate  circumstances,  but 
they  are  also  more  unscrupulous  and  remorseless.  They 
are  generally  shrewd  enough  to  avoid  legal  penalties,  but, 
tested  by  the  Sermon  on  the  Mount,  there  is  no  more  dis- 
honest and  mean  class  of  persons  than  the  very  rich  men. 
Men  like  Peter  Cooper  are  very  rare.  To-day,  the  expres- 
sion, "  Woe  unto  you  rich  men,"  has  the  same  profound  sig- 
nificance it  had  when  Christ  uttered  it  over  1800  years  ago. 

The  charitable  gifts  of  the  rich  are  often  cited  as  evi- 
dence of  their  goodness.  But  the  merit  of  a  gift  is  deter- 
mined only  by  the  sacrifice  thereby  occasioned  the  donor. 
He  who  defrauds  society  of  five  hundred  thousand  makes 
a  poor  atonement  and  restitution  by  giving  one  hundred 
thousand  to  a  hospital  or  church.  More  justice  and  less 
charity  would  benefit  the  working  classes.  It  is  a  common, 
but  grievous,  error  for  voters  to  imagine  the  political  de- 
sires of  the  rich,  priina  facie,  best  for  the  welfare  of  the 
public. 

DIFFERENT   RATES   OF   INTEREST. 

Whether  a  lender  of  money  can  oblige  a  borrower  to  pay 
more  for  its  use  than  equity  require    he  should,  and,  if  so, 


HIGH  RA  TES  OF  INTERES7\ 


Z77 


to  what  extent  this  injustice  can  be  carried,  depends  on  at- 
tendant circumstances.  The  scarcity  of  capital,  the  urgent 
necessity  of  legal  tender  wherewith  to  avoid  still  greater 
impending  losses,  the  borrower's  lack  of  pecuniarily  strong 
friends,  the  number  of  persons  competing  for  loans  relative 
to  the  amount  to  be  loaned,  usury  laws,  and  many  other 
conditions  determine  these  questions. 

Thirty-five  years  ago,  money  in  Iowa  commanded  40  per 
cent,  per  annum  interest.  This  was  chiefly  because  the 
majority  of  emigrants  to  that  State  needed  plows,  wagons, 
axes,  saws  and  kindred  forms  of  capital  wherewith  to  build 
their  homes  and  improve  their  farms.  Capital  was  scarce 
and  the  need  of  it,  imperative.  Money,  the  kind  of  capital 
with  which  all  other  kinds  can  be  obtained,  was  scarce  and 
in  comparatively  few  hands.  These  few  persons  naturally 
took  advantage  of  the  situation,  and  demanded  as  high 
rates  of  interest  as  the  borrowers  could  be  made  to  pa}'. 
Interest  in  Iowa  is  now  about  one-fifth  what  it  then  was, 
because  capital  has  become  plentier,  money  is  in  a  greater 
number  of  hands,  and  consequently  the  necessities  of  the 
people  cannot  be  taken  advantage  of  to  the  same  extent  as 
formerly.  But  the  same  principle  exists  now  that  did  when 
interest  was  much  higher.  The  rate  of  interest  is  still  too 
high,  because  the  lenders  can  still  take  advantage  of  the 
borrowers'  necessities. 


NOTE. 


Alexander  Del  Mar,  in  his  "Science  of  Money,"  tells  us  that  the 
rate  of  interest  depends  on  "  the  rate  at  which  the  means  of  human  sub- 
sistence increase.  Other  things  being  equal,  were  this  rate  to  double,  the 
net  rate  of  interest  would  double  ;  and  were  the  rate  of  the  increase  of 
subsistence  to  diminish  one-half,  the  net  rate  of  interest  would  diminish 
one-half." 

The  above  cause,  he  tells  us,  "  is  the  ultimate  cause  of  a  rate  of  inter- 
est." He  next  says  "  that  the  market  rate  of  interest  differs  from  the 
rate  at  which  the  means  of  subsistence  increase,  because  the  lender  must 
charge  an  additional  percentage  to  insure  himself  against  the  risk  of 
losing  the  money,  for  taxes,  and  for  labor  of  superintending  the  loan." 

He  then  illustrates  his  propositions  by  stating  that  "in  the  United 


378 


SOCIAL  STRUGGLES. 


States  the  increase  of  the  means  of  subsistence  is  probably  about  3I  per 
cent.,  while  risk,  taxes  on  loans  of  money,  and  cost  of  superintendence 
combined,  probably  amount  to  if  per  cent,  more,  making  the  average 
market  rate  about  5  per  cent. 

The  essence  of  this  learned  gentleman's  essay  on  interest  is  that  "  the 
rate  at  which  subsistence  increases  "  is  the  net  rate  of  interest  which  the 
lender  of  money  should  equitably  receive  for  its  use ,  and  that,  in  fact, 
such  is  the  rate  which  he  actually  does  receive. 

In  the  first  place,  Mr,  Del  Mar  errs  in  stating  5  per  cent,  as  the  average 
market  rate  of  interest  in  the  United  States.  In  fact,  it  is  nearer  six  per 
cent.  Mr.  Del  Mar  probably  reaches  his  conclusion  by  computing  the 
money  loaned  in  New  York  and  a  few  other  large  cities  "  on  call "  as 
money  loaned  at  the  market  rate  of  interest.  But  this  is  not  strictly 
proper.  Money,  which  the  borrower  is  expected  to  return  any  day  when 
requested  by  the  lender  to  do  so,  is  not  completely  loaned.  It  is  not  as 
fully  under  the  control,  and  cannot  be  used  with  the  same  freedom  as  it 
could  if  the  borrower  had  ample  and  secure  time  for  its  employment. 
There  is  a  reservation  of  possession  made  by  the  lender  when  he  loans 
it  on  call.  That  is,  he  reserves  the  right  to  take  possession  of  his  money 
any  day  he  may  elect.  In  fact,  his  control  of  money  loaned  "on  call," 
with  ample  pledges  given  for  its  payment  as  specified,  is  virtually  as 
absolute  as  if  he  had  deposited  the  money  in  a  bank  ready  to  be  taken 
out  on  any  day  by  his  check.  In  the  latter  case  he  trusts  the  bank  will 
always  honor  his  check  and  pay  "on  call."  But  when  he  loans  on  call, 
with  pledges  received  for  security,  he  does  not  trust  any  one  ;  he  relies 
on  the  pledges  in  his  possession,  confident  that  if  payment  be  not  made 
their  sale  will  yield  ample  means  of  payment. 

This  is  a  far  different  condition  from  what  exists  when  money  is 
loaned  for  a  considerable  period  of  time.  In  that  case,  no  matter  how 
advantageous  arising  circumstances  might  make  it  for  the  lender  to 
recall  his  loan  on  a  certain  day,  he  cannot  do  so.  The  money  is 
beyond  his  control  until  the  expiration  of  the  time  for  which  it  was 
loaned.  This  latter  condition  is  the  only  one  which  is  a  fair  test 
of  the  interest  of  money,  because  it  is  the  only  way  in  which  a  loan  of 
money  can  be  fully  and  unreservedly  made. 

Mr.  Del  Mar's  idea  that  the  rate  of  interest  is  partially  formed  of  a 
sufficient  sum  to  pay  the  taxes  on  the  money  and  the  legal  expenses  of 
making  the  loan  is  disposed  of  by  the  fact  that  taxes  and  attorney's  fees 
attendant  on  loans  are  almost  invariably  paid  by  the  borrower. 

One  other  claim  of  Mr.  Del  Mar  remains ;  to  wit,  that  an  addition  of 
at  least  one  per  cent,  should  be  made  to  what  he  calls  the  "  net  rate  of 
interest"  ;  i.e.,  the  rate  at  which  the  means  of  subsistence  increase,  as 
insurance  for  repayment  of  the  loan. 

Suppose  a  farmer  borrow    $1000  for  five  years,  for  the  purpose  of 


TFI/r  INTEREST  IS  TOO  HIGH. 


m 


purchasing  additional  capital  to  cultivate  his  farm,  and  thereupon 
mortgages  his  farm,  worth  $5000,  to  secure  its  payment.  Mr.  Del 
Mar's  idea  appears  to  be,  that  inasmuch  as  the  increase  of  the  farmer's 
products  is  about  3  1-3  per  cent.,  that  is  the  rate  of  interest  he  is  equit- 
ably called  on  to  pay  for  the  use  of  the  money ;  and  he  should  also  pay 
nearly  two  per  cent,  more  to  insure  the  borrower  that  the  money  will 
be  repaid.  But  the  farmer  has  already  insured  payment  of  the  loan  by 
giving  a  mortgage  on  his  farm.  This  is  ample  insurance  of  itself.  In 
equity,  why  should  the  farmer  insure  the  lender  further  ?  The  farmer 
incurs  all  the  risk  of  losing  the  |iooo  by  bad  crops,  tire,  death  of  cattle, 
etc.  The  lender  does  not  insure  him  against  loss.  Why  then  should 
the  farmer  pay  additional  interest  to  insure  the  lender  further  than  the 
mortgage  has  insured  him  ? 

There  is  a  comparatively  small  class  of  loans  which  are  specially  haz- 
'ardous  to  the  lender.  In  such  cases  a  high  rate  of  interest,  or,  in  other 
words,  an  extra  percentage  as  an  insurance  premium,  is  just.  Loans  on 
ships  are  an  illustration  of  this.  But  the  great  mass  of  loans  are  made 
by  giving  mortgages  on  land  or  other  good  security  for  payment. 

If  we  admit  that  the  borrower  should  pay  an  addition  to  the  net  rate  of 
interest,  as  an  insurance,  sufficient  to  cover  the  risk  of  non-payment,  it 
by  no  means  follows  that  this  insurance  should  equitably  be  nearly  two 
per  cent.  If  one  per  cent,  per  annum  could  be  generally  received  for  in- 
suring payment  of  loans,  an  enormously  profitable  business  could  be 
done  by  such  an  insurance  company,  in  all  of  our  large  cities.  One-half 
of  one  per  cent,  would  be  sufficient  to  amply  insure  payment  of  mortgage 
loans,  and  municipal  bonds,  in  the  greater  portion  of  this  country. 

The  fact  assigned  by  Mr.  Del  Mar  as  "  the  ultimate  cause  of  a  rate  of 
interest "  has  unquestionably  a  powerful  tendency  to  produce  a  market 
rate  of  interest.  But  it  is  only  07ie  of  several  other  facts  which  operate 
to  determine  the  actual  interest  rate.  The  dominant  factor  is  that  above 
stated  in  the  text ;  viz.,  the  industrial  and  social  war  constantly  carried  on 
by  each  member  of  the  community  against  all  other  members,  and  the 
necessity  of  capital  wherewith  to  supply  human  wants  and  desires. 

A  very  prominent  cause  of  a  higher  rate  of  interest  being  paid  than 
is  earned  by  the  money  borrowed,  is  the  fact  that  such  interest  is  usually 
paid  on  only  a  portion  of  the  debtor's  total  capital,  Circumstances  are 
such  that  it  is  supposed  the  loan  will  add  largely  to  the  productiveness 
of  the  capital  previously  possessed. 

For  example,  a  farmer  has  150  acres  of  fertile  land,  well  supplied  with 
buildings,  stock  and  farming  implements  of  all  kinds,  except  plows  and 
wagons.  Without  these  essential  tools,  it  is  impossible  to  advanta- 
geously cultivate  the  farm.  Under  such  conditions,  the  farmer  can  pay  a 
higher  rate  of  interest  than  the  creditor  is  equitably  entitled  to,  and  still 


38o 


SOCIAL  STRUGGLES. 


be  far  better  off  than  he  would  have  been  without  the  means  of  buying 
needed  tools. 

The  doctrine  is  usually  taught  that  legal  limitations  on  the  rate  of 
interest  make  the  actual  rate  higher  and  thus  increase  the  burdens  of 
debtors.  The  repeal  of  usury  laws  is  frequently  asked  for  on  the  ground 
that  It  would  help  debtors  by  lowering  the  rate  of  interest. 

But  what  class  of  persons  is  it  that  ask  for  the  repeal  of  usury  laws  } 
If  such  laws  resulted  in  greater  profits  to  the  money-lenders,  would  those 
persons  want  them  repealed .'' 

The  repeal  of  usury  laws  is  always  asked  for  by  the  money-lenders 
under  the  hypocritical  pretense  that  such  a  measure  would  lower  the  rate 
of  interest.  When  the  legal  rate  of  interest  is  placed  at  six  per  cent,  no 
legal  obstacle  is  thereby  presented  to  lending  money  at  a  lower  rate. 

A  few  years  ago,  the  Connecticut  Legislature  was  persuaded  by  charla- 
tans that  a  repeal  of  the  usury  law  would  at  once  prevent  the  flow  of  cap- 
ital from  the  State,  make  money  plentier  and  thus  lower  the  rate  of  inter- 
est. The  experiment  was  tried.  The  result  was  an  immediate  attempt 
by  the  money-lenders  to  compel  payment  of  higher  rates.  In  the  major- 
ity of  cases  they  were  more  or  less  successful.  Instead  of  six  per  cent., 
money  loaned  at  seven,  eight,  nine,  and  sometimes  twelve  per  cent,  per 
annum.     A  re-enactment  of  the  usury  law  restored  the  former  conditions. 

Capital,  unless  dishonestly  got,  represents  savings.  Savings  represents 
industry  and  economy.  A  fair  rate  of  interest  to  capital  is  an  encour- 
agement to  industry  and  frugality,  and  therefore  conducive  to  the  public 
welfare. 

But  in  order  to  be  equitable,  the  rate  of  interest  should  not  be  greater 
than  the  relative  earnings  of  the  capital  thus  combined  with  labor.  In 
fact,  the  lender  receives  more  than  such  an  equitable  proportion,  in  a  mul- 
titude, if  not  in  the  majority  of  instances.  The  borrower  often  becomes 
bankrupt  in  consequence.  Thus  the  goose  that  laid  golden  eggs  is  sacri- 
ficed to  greed.  A  portion  of  the  principal  is  lost  by  trying  to  get  an  unfair 
rate  of  interest. 

The  actual  difference,  in  the  burden  upon  the  debtor,  between  three, 
four,  five  and  higher  rates  of  interest  is  not  usually  recognized.  If  three 
per  cent,  be  the  average  net  earnings  of  labor  and  capital,  the  average 
borrower  is  not  injured  at  all  by  payment  of  three  per  cent,  interest. 
He  derives  the  same  benefit  from  the  use  of  the  money  that  he  pays  for 
it.  But  if  he  pay  four  per  cent.,  the  benefit  received  from  the  loan  is 
paid  and  one  third  more.  But  five  per  cent,  interest  takes  two  thirds 
more  than  the  advantage  of  the  loan  from  the  debtor.  The  actual  ex- 
pense to  a  debtor  of  a  five  per  cent,  rate  of  interest  is  therefore  twice 
as  great  as  a  four  per  cent.  rate. 

The  aforesaid  principle  is  true  of  the  payment  of  all  rates  of  interest 
above  the  earnings  of  the  money  on  which  it  is  paid.    The  burden  of  in- 


WHEN  DEBT  IS  PROFITABLE. 


381 


terest  is  measured  by  its  excess  over  ihe  profit  derived  from  the  loan 
and  not  by  the  total  rate. 

A  debt  is  not  necessarily  a  burden  ;  it  may  be  a  source  of  profit.  Per- 
sons have  grown  rich  from  the  income  of  their  debts.  If  the  income 
from  what  constitutes  a  debt  exceed  the  interest  paid  thereon,  the  debtor 
reaps  an  advantage  from  being  in  debt. 

When  a  banker  owes  his  depositors  five  hundred  thousand  dollars,  on 
which  the  total  expenses  are  one  half  of  one  per  cent,  per  annum,  and 
keeps  four  hundred  thousand  of  this  money  loaned  at  six  per  cent.,  he 
is  getting  a  net  income  of  twenty-one  thousand  five  hundred  dollars  an- 
nually from  his  debts.  When  a  national  bank  borrows  five  millions 
from  the  government  at  one  per  cent,  per  annum,  and  keeps  four  millions 
loaned  at  five  per  cent.,  it  derives  an  annual  profit  from  its  debt  of  one 
hundred  and  fifty  thousand  dollars. 

irsury  laws  should  discriminate  between  loans  amply  secured  by  mort- 
gage on  real  estate,  or  by  pledge  of  bonds  or  similar  ample  security, 
and  loans  resting  entirely  on  personal  promises.  The  rate  of  interest  on 
good  mortgage,  or  similar  security,  ought  not  to  exceed  four  per 
cent,  per  annum ;  and  loans  on  personal  security,  not  over  five  per  cent, 
per  annum.  Such  measures  would  increase  the  probabilities  of  the 
borrower's  success  in  business  enterprises,  and  would  therefore  diminish 
the  aggregate  of  loaned  money  lost  by  bankruptcy  of  debtors.  The 
whole  community  would  thus  be  benefited  by  fair  dealing. 


CHAPTER  XVII. 

The  Relations  of  Capital  and  Labor. — Need  of  more  Capital  than  before 
Expensive  Machines  were  used. — Mistaken  Ideas  about  Freedom  of 
Trade. — Patent  Laws  cause  an  Inequitable  Distribution  of  Wealth. — 
Nature  of  the  Antagonism  between  Capital  and  Labor.— Different 
Interests  produce  Different  Conduct. — Why  Laws  were  Created. — 
Why  Laws  should  Continually  Change. — Contention  between  Labor 
and  Capital  should  be  settled  by  Law. — Origin  of  Law. — Further 
progress  is  Necessary. — Ought  every  Man  be  Allowed  to  Do  as 
He  pleases. — A  Dangerous  Doctrine  for  the  Rich  to  Preach. — What 
should  be. — Rise  of  Rents. — Hours  of  Labor. — Comparison  with  a 
Hundred  Years  ago. — Is  Equity  being  done  .'' — Free  Trade  is  Pos- 
sible only  when  Both  Parties  have  Liberty  of  Choice. — How  Work- 
men may  Rob  Employers. — When  Free  Trade  occurs. — What  a 
Good  Bargain  is. — Laws  are  Outgrowths  of  Human  Necessity. — 
Siege  of  Paris. —  When  Laws  need  Revision. — Test  of  the  Wisdom 
of  a  Law. 

With  what  tranquillity  and  calm  resignation  we  all  bear 
the  losses  and  sufferings  of  others. 

To  a  large  extent,  capital  represents  the  labor  of  past 
generations.  It  may  be  called  dead  men's  labor,  because  a 
large  portion  of  it  was  created  by  men  now  dead.  This 
fact,  in  the  continual  struggle  between  capital  and  labor, 
gives  an  advantage  to  capital.  Capital  represents  the  dead 
laborer.  Labor  is  represented  by  the  living  workman. 
Capital  needs  protection  from  rust,  fire  and  decay;  but,  un- 
less in  form  of  living  things,  it  does  not  need  food,  warmth 
and  clothing.  Labor  must  have  food,  shelter,  warmth,  and 
clothing ;  it  cannot  wait  a  year,  a  month,  or  a  week ;  it 
must  have  them  constantly  or  perish  from  cold  and  starva- 
tion. Capital  is  not  in  need  of  daily  sustenance.  Dead 
muscles  need  neither  food,  drink,  or  shelter  ;  and  therefore 
capital,  their  representative,  can  lay  its  plans  for  the  future 
and  wait.  It  knows  the  living  muscles  must  be  fed  and 
that  imperious  necessity  will  forbid  their  waiting  in  idleness. 
The   labor   of  the    dead    thus   often    gains  a  victory  over 

382 


POWER  OF  CAPITAL.  383 

the  labor  of  the  Hving; — the  lifeless  hand  is  most  potent, 
— it  places  fetters  on  the  one  throbbing  with  warm  blood. 

The  man  who  keeps  his  capital  secure,  but  idle,  loses  only 
the  profits  he  might  have  made  from  its  use.  The  poor,  idle 
workman  loses  his  entire  capital  every  day  of  his  idleness. 
Capitalists  often  lose  large  sums  as  the  result  of  strikes ; 
but  the  damage  to  the  idle  workmen  is  usually  relatively 
larger. 

NEED    OF   MORE    CAPITAL    THAN    BEFORE   EXPENSIVE    MA- 
CHINES  WERE   USED. 

Comparatively  little  labor  can  be  done  with  naked  hands. 
A  tool  of  some  kind  is  usually  needed,  and  this  tool  is  capi- 
tal. A  man  who  cuts  grass  or  grain  with  his  own  tool  needs 
a  little  capital  if  he  use  a  common  scythe  to  perform  the 
work.  He  needs  much  more  capital  if  he  use  a  team  of 
horses  and  a  mower  or  reaper.  This  is  why  labor-saving 
machines  tend  to  give  capital  an  advantage  over  labor. 
Some  of  *them  are  very  expensive,  and  so  efficient  that  a 
workman  who  should  undertake  to  compete  therewith,  by 
hand  labor,  with  a  few  simple  tools,  could  only  earn  from 
one  to  five  cents  a  day.  This  puts  the  man  with  nothing 
but  his  bare  hands  at  a  greater  disadvantage  to  the  capital- 
ist than  he  was  two  hundred  years  ago.  Labor  has  always 
needed  capital  ;  the  changes  wrought  by  new  inventions 
simply  make  it  imperatively  necessary  for  labor  to  use  a 
larger  amount  of  capital  in  the  performance  of  a  certain  ser- 
vice, in  order  to  successfully  compete  with  those  who  are 
supplied  with  improved  tools.  In  the  end,  new  inventions 
benefit  the  laborer,  but  there  is  a  stage  in  their  history  when 
they  can  be  used  as  instruments  to  increase  the  profits  of 
the  rich,  and  to  unfairly  lower  the  wages  of  the  poor. 

The  enormous  advantage  given  to  capitalists  by  the  in- 
vention of  expensive  machinery  which  renders  hand  com- 
petition utterly  impossible  is  increased  by  our  patent  law  sys- 
tem. In  the  majority  of  instances,  inventors  lack  the  requi- 
site capital  to  utilize  their  patent  after  it  is  obtained.  In 
most  cases  the  result  is  the  sale  of  the  patent,  at  a  nomi- 


;84 


SOCIAL  STRUGGLES. 


nal  sum,  to  a  capitalist,  who  is  thereby  enabled  to  monopo- 
lize the  manufacture  of  a  particular  thing.  No  matter 
how  large  his  profits,  nor  how  necessary  to  the  progress  of 
society  his  goods  may  be,  the  whole  power  of  the  Govern- 
ment is  marshaled  to  prevent  any  one  from  interfering  with 
his  exclusive  privilege.  The  owners  of  patents  are  thus 
often  enabled  to  levy  an  enormous  tax  on  the  nation.  At 
the  same  time  the  wages  of  their  operatives  may  be  low,  and 
many  persons  who  formerly  earned  fair  wages  in  the  same 
kind  of  industry  with  the  old  and  inferior  tools  are  thrown 
out  of  employment. 

MISTAKEN   IDEAS   ABOUT   FREEDOM    OF   TRADE. 

It  has  been  said  that  every  one  is  "  free  "  to  buy  patented 
goods  or  not,  as  they  choose.  But,  in  fact,  the  majority  are 
compelled  to  buy,  either  the  patented  machine  which  per- 
forms a  certain  service  at  a  diminished  cost,  or  the  cheap- 
ened article  manufactured  therewith. 

Suppose  there  are  ten  dealers  in  tin-ware  in  a  ceftain  city, 
and  a  machine  be  invented  wherewith  one  man  can  perform 
the  labor  in  making  tin-ware  which  previously  required  the 
work  of  six  men.  When  one  dealer  buys  one  of  these  ma- 
chines and  puts  it  at  work,  all  others  in  competition  with  him 
are  forced  either  to  buy  a  machine,  to  buy  the  goods  made 
by  the  one  in  operation,  or  be  made  bankrupt. 

PATENT   LAWS    CAUSE   AN    INEQUITABLE   DISTRIBUTION    OF 

WEALTH. 

The  great  wealth  created  in  England  as  a  result  of  im- 
proved machinery  for  working  iron  and  making  cotton  and 
Avoolen  goods  was  not  equitably  distributed  among  the 
workmen  whose  toil  created  said  wealth.  On  the  contrary, 
an  English  historian  tells  us  that  from  1780  to  1820,  the  pe- 
riod when  some  of  the  greatest  inventions  were  cheapening 
the  manufacture  of  goods,  the  English  laborer  fared  rela- 
tively worse  than  at  any  time  for  six  hundred  years. 

An  inventor  is  a  benefactor  of  society.  He  should  be 
well  and  liberally  paid  for  his  mental  and  physical  labors, 


DIFFERENT  VIEWS. 


385 


and  for  the  expenses  incurred  in  perfecting  his  invention. 
But  this  compensation  should  not  be  made  in  such  form  as 
to  prevent  the  benefits  of  the  invention  from  being  at 
once  shared  by  the  whole  community. 

NATURE    OF    THE     ANTAGONISM    BETWEEN     CAPITAL  AND 

LABOR. 

What  has  been  heretofore  said  about  the  interest  of 
money  applies  to  the  general  relations  of  capital  and  labor. 
It  is  undeniably  true  that  to  a  certain  extent  they  are  mut- 
ually dependent  on  each  other,  and  that  there  should  be  an 
equitable  and  a  harmonious  union  between  them.  But,  as 
a  matter  of  fact,  this  condition  generally  exists  only  in  the 
imagination  ;  each  seeks  its  own  welfare  with  little  regard 
for  the  interest  of  the  other. 

Much  has  been  said  about  the  identity  of  interest  exist- 
ing between  labor  and  capital.  But  in  fact  their  interests 
are  very  far  from  being  identical. 

It  is  true  that  it  is  not  to  the  selfish  interest  of  either  to 
force  their  opponents  into  so  hard  a  bargain  as  to  utterly 
destroy  all  power  or  desire  to  fulfill  any  part  of  it.  It  is 
not  to  the  interest  of  capital  to  force  labor  into  starvation 
or  insurrection.  It  is  not  to  the  interest  of  labor  either  to 
destroy  capital,  or  to  prevent  it  from  receiving  any  share 
of  the  profits  of  industrial  enterprises. 

Perhaps  it  would  be  more  accurate  to  say  that  there  is  an 
imaginary  point  at  which  the  just  dues  of  labor  and  the 
profits  of  capital  would  be  both  satisfied  in  a  manner  at 
once  equitable  and  expedient.  But,  while  such  an  ideal 
harmony  may  exist,  the  interests  of  capital  and  labor  are 
far  from  being  identical  as  the  opposing  parties  understand 
them. 

The  average  capitalist  will  tell  you  that  his  interests  and 
those  of  his  employees  are  the  same ;  but  when  called  on  to 
state  those  interests,  he  will  define  them  differently  from 
his  workmen.  The  laborer  will  perhaps  tell  you  the  same 
thing.  But  he  too,  if  asked  what  those  interests  are,  will 
state  them  differently  from  what  his  employer  would.  The 
25 


386 


SOCIAL  STRUGGLES. 


slave-holder  never  had  any  doubts  about  the  harmony 
between  his  interests  and  those  of  his  slaves;  but  the  slave 
had  a  different  view  of  the  matter.  To-day,  the  rich  and 
privileged  classes  of  England  regard  their  interests  as 
identical  with  those  of  the  multitude  of  poorly  paid  and 
poorly  fed  laborers  ;  but  the  toilers  look  on  those  interests  in 
a  far  different  light  from  those  who  are  not  making  a  painful 
struggle  for  the  bare  necessaries  of  life.  The  privileged 
classes  suppose  there  is  harmony  when  matters  are  arranged 
to  suit  themselves,  without  consulting  others  whose  rights 
may  be  sacrificed  thereby. 

The  rapidly  growing  army  of  young  men  and  women  in 
the  United  States  who  have  never  earned  in  their  whole 
lives  the  bread  they  consume  in  one  day,  will  talk  about 
their  interests  being  identical  with  that  of  the  farmers  and 
mechanics.  But  this  identity,  they  usually  imagine,  consists 
in  living  a  life  of  ease  and  consuming  the  products  of 
others'  toil.  They  fail  to  see  that  labor  is  not  always  an 
amusement. 

Capital  and  labor  have  always  been  at  war  with  each  other. 
They  are  natural  antagonists  in  the  sense  that  buyers  and 
sellers  are.  A  seller  naturally  tries  to  obtain  the  highest 
attainable  price ;  a  buyer  seeks  to  get  what  he  wants  at  the 
lowest  possible  price.  Comparatively  few  persons  are 
governed  by  considerations  of  equity ;  the  majority  are 
guided  by  selfishness,  and  this  is  often  so  blind  as  to 
overreach  itself  and  defeat  its  own  objects.  This  is  true  of 
multitudes  who  imagine  themselves  governed  only  by  the 
highest  principles  of  religion  and  morality.  In  fact,  some 
of  the  hardest,  meanest  and  most  grasping  persons  in  the 
world  are  found  among  those  who  pride  themselves  on  their 
strict  rectitude. 

An  employer  is  a  buyer  of  labor  and  a  seller  of  money. 
He  does  not  usually  ask:  What  is  just?  His  selfishness 
prompts  him  simply  to  inquire  how  low  wages  he  can  name 
and  get  the  required  services.  A  workman  is  a  seller  of 
labor  and  a  buyer  of  money.  He  naturally  tries  to  sell  his 
labor  as  dearly  as  possible  and  to  buy  money  as  cheaply  as 


NEED  OF  JUST  LAWS.  ^S/ 

he  can  ;  his  conduct  is  usually  controlled  by  the  same  mo- 
tives that  influence  his  employer.  There  is  not  one  kind  of 
human  nature  for  one  class,  and  another  kind  of  human  na- 
ture for  another  class.  Legal  regulations  are  necessary  to 
prevent  opportunities  to  commit  wrong  from  being  trans- 
lated into  actual  injustice  by  all  classes. 

We  have  heard  much  about  the  wickedness  of  arraying 
labor  against  capital.  They  are  already  arrayed — their  war- 
fare is  merely  one  phase  of  the  struggle  for  existence  which 
has  always  taken  place  between  one  animal  and  another. 
Nothing  is  gained  either  by  ignoring  or  misrepresenting 
existing  facts.  In  several  ways,  during  recent  years,  mon- 
eyed capital  has  carried  on  an  organized,  aggressive  and 
successful  campaign  against  labor  and  other  kinds  of  capi- 
tal. Many  think  that  right,  who  are  horrified  at  the  idea  of 
labor  combining  against  capital  ;  their  notions  of  morality 
depend  on  whose  ox  is  getting  gored. 

If  money-lenders  have  a  right  to  advance  their  interests 
by  organizing  a  trade  union  under  the  name  of  a  "■  Bankers* 
Convention,"  have  not  brick-layers  a  right  to  form  a  Union 
for  the  protection  of  their  interests?  If  stove  dealers  have 
a  right  to  combine  and  fix  the  price  of  stoves,  have  not 
those  whose  labor  creates  those  stoves  an  equal  right  to 
combine  for  the  purpose  of  fixing  the  price  of  their  labor? 
But  a  little  reflection  shows  that  the  organization  of  differ- 
ent interests  and  trades  for  mutual  help,  and  for  protection 
against  the  aggressions  of  other  persons  and  organizations,  is 
founded  on  a  radically  false  principle.  One  class,  one  trade 
and  one  interest  can  undoubtedly,  in  the  outset,  promote 
its  individual  prosperity  by  "organizing."  But  other  and 
opposing  organizations  will  soon  be  formed;  and  this  pro- 
cess may  continue  until  every  separate  trade,  class  and 
interest  in  the  entire  nation  has  what  is  called  "an  organ- 
ization." Society,  as  a  whole,  will  then  be  back  to  the 
point  from  which  the  first  combination  started,  with,  how- 
ever, an  essential  difference ;  viz.,  the  great  expense  of 
maintaining  a  multitude  of  organizations  which  are  of  no 
benefit  whatever,  except  to  those  who  draw  salaries. 


388 


SOCIAL  STRUGGLES. 


The  true  way  is  to  make  the  laws  and  their  execution 
broad  and  just,  and  dissolve  all  combinations  of  particular 
trades  or  persons.  Every  citizen  should  have  equal  rights 
and  protection,  not  from  a  class  organization,  but  from  the 
justice  of  laws  covering  every  person  and  place. 

DIFFERENT   INTERESTS   PRODUCE   DIFFERENT   CONDUCT. 

Many  well-meaning  efforts  to  equitably  adjust  the  relations 
of  labor  and  capital  have  failed  because  made  from  the  wrong 
standpoint,  viz.:  On  the  theory  of  their  natural  harmony. 
Persons  with  similar  interests  naturally  fraternize  with 
each  other.  There  is  no  need  to  effect  harmony,  if  it  nat- 
urally exist. 

Animals  with  similar  interests  live  together  peacefully. 
Quail  do  not  quarrel.  But  the  interests  of  some  animals 
conflict  with  the  interests  of  other  animals,  and  even  with 
those  of  their  own  race.  How  would  a  man  succeed  who 
attempted  to  persuade  a  fox  and  a  flock  of  quail  that  their 
interests  were  harmonious?  The  interests  of  different 
classes  of  persons  are  often  nearly  as  diverse  as  the  inter- 
ests of  a  fox  and  a  quail.  The  only  difference  is  this :  The 
fox  wishes  to  live  by  eating  the  quail.  One  class  of  men 
wish  to  live  by  eating  the  fruit  of  other  men's  labor.  In 
both  cases,  one  animal  has  a  view  of  his  interests  different 
from  the  opinion  of  the  other  animal. 

No  progress  can  be  made  in  the  settlement  of  any  ques- 
tion until  the  fundamental  facts  and  principles  are  recog- 
nized, just  as  they  are.  Nothing  is  gained  by  assuming  a 
state  of  things  which  has  no  existence.  We  must  recog- 
nize that  a  hog  and  a  man  have  many  traits  in  common, 
before  we  can  make  substantial  progress  in  adjusting  the 
relations  of  capital  and  labor.  Moreover  we  must  remem- 
ber that  the  selfishness  of  all  classes  needs  restraint. 
Whether  a  person  be  a  capitalist  or  a  poor  day  laborer,  he  is 
always  simply  a  man. 

WHY   LAWS   WERE   CREATED. 
In  an  open  fight  between  persons  or  parties  of  unequal 
strength  and  power  of  endurance,  the  probabilities  are  that 


NECESSITY  OE  LA  W. 


389 


the  weaker  must  inevitably  succumb  to  the  stronger,  no 
matter  what  form  of  contest  may  take  place.  It  therefore 
necessarily  follows,  that  in  all  forms  of  war  the  few  strong 
will  become  masters  of  the  many  weak,  by  beating  them 
one  by  one.  But  by  combining  together,  the  numerous 
weak  can  create  a  force  capable  of  controlling,  and  if  need 
be,  subduing  the  small  number  whose  individual  strength  is 
above  the  average;  and  who,  if  left  "free"  to  follow  their 
own  inclinations,  will  surely,  encroach  upon  the  rights  of 
others,  weaker  or  less  cunning  than  themselves.  Such  a 
combination  states  what  it  deems  equitable  between  man 
and  man,  and  most  conducive  to  the  best  interests  of  the 
whole  community.  These  statements  are  called  "  laws," 
and  are  made  in  a  negative  form.  Instead  of  defining  the 
conduct  that  centuries  of  experience  have  pronounced  the 
best,  laws  are  enumerations  of  acts  which  the  aggregate 
wisdom  of  mankind  have  found  adverse  to  the  well-being  of 
society.  All  conduct  and  acts  not  thus  designated  and  pro- 
hibited by  various  penalties  being  attached  to  their  commis- 
sion, are  presumed  proper  to  pursue  and  commit. 

WHY   LAWS   SHOULD   CONTINUALLY   CHANGE. 

The  enormous  amount  of  legal  literature  in  the  world  has 
grown  from  the  action  of  two  forces.  First.  The  necessity 
of  devising  some  means  to  prevent  individuals  with  unusual 
strength,  cunning  and  selfishness,  from  preying  upon  the 
rest  of  society.  Legislation  has  been  enacted  for  the  pur- 
pose of  encouraging  such  persons  to  devote  their  energies 
to  harnessing  the  forces  of  nature  in  the  service  of  man- 
kind, and  thus  creating  new  wealth  ;  and  discouraging  them 
from  acting  the  part  of  beasts  of  prey,  and,  in  a  great  va- 
riety of  ways,  living  on  the  wealth  created  by  and  justly 
belonging  to  other  persons. 

Second.  The  continual  changes  in  the  conditions  sur- 
rounding mankind  incident  to  their  increase  in  numbers,  and 
growth  in  knowledge  of  morals,  science  and  art,  have  inces- 
santly created  new  and  different  opportunities  for  men  to 
plunder  and  oppress  each  other.      Many  laws  well  adapted 


-QQ  SOCIAL  STRUGGLES. 

to  restrain  and  regulate  the  conduct  of  mankind  a  thousand 
years  ago,  would  be  of  no  service  now.  We  have  outgrown 
them.  New  conditions  have  arisen  which  those  who  en- 
acted the  ancient  laws  did  not  have  before  them ;  and, 
therefore,  by  no  possibility  could  frame  laws  suitable  for  the 
development  of  a  human  intelligence,  and  a  state  of  society 
of  which  they  had  not- the  faintest  conception. 

The  principle  underlying  all  laws  fit  to  be  made,  is  pre- 
cisely the  same  in  all  ages  of  the  world ;  viz.,  the  encourage- 
ment of  virtue;  the  discouragement  of  vice.  But  the  means 
best  fitted  to  carry  out  this  principle  must  be  adapted  to 
the  conditions  under  which  a  society  governed  by  law  ex- 
ists. As  these  conditions  are  constantly  changing,  unless 
the  laws  change  with  them,  they  become  more  or  less  inop- 
erative, and  often  become  instruments  of  oppression ;  thus 
reversing  the  result  for  the  attainment  of  which  they  were 
originally  enacted.  TJie  development  of  laiv  should  therefore 
keep  pace  zvitJi  the  development  of  man.  Those  who  resist 
changes  in  laws,  no  matter  to  what  subject  those  laws  relate^ 
are  resisting  human  progress.  They  are  endeavoring  to 
keep  a  growing  and  developing  world  clad  in  the  garments 
which  it  has  outgrown. 

CONTENTION   BETWEEN   LABOR  AND  CAPITAL   SHOULD 
BE   SETTLED   BY   LAW. 

Therefore  the  best  way  to  adjust  the  contention  of  cap- 
ital and  labor  is  a  resort  to  what  centuries  of  experience 
have  shown  is  the  best  mode  of  settling  all  other  kinds  of 
strife  which  grow  out  of  the  tendencies  of  human  nature; 
viz.,  legislation  adapted  to  the  existing  conditions.  A  con- 
siderable portion  of  our  laws  relative  to  finance,  labor  and 
capital  are  unfited  to  our  present  stage  of  development. 
The  discoveries  in  science  and  inventions  in  art  which  have 
recently  occurred,  have  wrought  great  changes  in  our  modes 
of  creating  and  distributing  wealth.  As  an  inevitable  re- 
sult, the  laws  created  with  reference  to  former  conditions 
are  unsuitable,  do  not  conform  to  the  facts,  and  are  inade- 
quate to  meet  the  requirements  of  the  present  state  of  affairs. 


WHA  T  LA  W  DOES. 


ORIGIN  OF  LAW. 


391 


In  past  ages  there  was  little  law.  The  strong  could,  and 
did  abuse,  rob  and  enslave  the  weak  with  impunity.  Law 
began  when  two  or  three  comparatively  weak  men  combined 
to  resist  the  injustice  and  wrong  of  one  stronger  man.  The 
slowly  growing  reign  of  law  has  displaced  anarchy  with 
order.  Man's  tendency  to  use  superior  physical  strength  for 
the  purpose  of  plundering  physical  inferiors  has  been  curbed 
to  a  great  degree  by  laws  directed  against  such  practices. 
It  has  also  partially  protected  the  mentally  weak  from  the 
selfishness  of  the  mentally  strong.  The  pecuniarily  weak 
are  likewise  partially  protected  from  the  rapacity  of  the 
pecuniarily  strong.  Schemes  to  commit  robbery  without 
overt  violence,  to  a  considerable  extent  are  placed  under 
the  ban  of  the  law. 

FURTHER   PROGRESS  IS  NECESSARY. 

But  we  need  to  take  further  steps  in  the  direction  we  have 
been  traveling  for  thousands  of  years.  Our  laws  must  be 
altered  to  conform  to  our  altered  conditions.  True  conserv- 
atism consists  in  constantly  maintaining  and  preserving  the 
proper  equilibrium  of  the  various  portions  and  forces  of 
society.  This  can  only  be  accomplished  by  so  changing  our 
social  and  legal  machinery  as  to  keep  them  constantly 
adapted  to  our  industrial,  intellectual  and  moral  develop- 
ment. If  we  would,  we  cannot  arrest  the  progress  of  man- 
kind. We  must  recognize  it  as  a  fixed  fact  and  conform 
our  institutions  to  supply  its  steadily  changing  needs  and 
demands.  Therefore,  before  we  can  intelligently  devise 
means  for  curing  the  present  contention  between  capital 
and  labor,  we  must  first  study  the  changes  which  have  oc- 
curred in  the  conditions  under  which  those  two  forces  are 
placed.  Meanwhile,  we  should  repress  all  conduct  which, 
although  apparently  peaceable,  savors  of  violence,  because  of 
its  being  a  summary  disturbance  of  existing  conditions. 
We  should  hasten  slowly.  The  natural  and  safe  method  of 
social  development  is  to  cautiously  take  only  one  forward 


2Q2  SOCIAL  STRUGGLES. 

step  at  a  time.  A  law  should  prevail  in  every  State  which 
would  prevent  an  employer  from  discharging  or  reducing  the 
wages  of  a  regular  employee,  without  first  giving  thirty  days' 
explicit  notice  thereof.  The  same  law  should  prevent  an 
employee  from  demanding  a  higher  rate  of  wages,  or  quitting 
work  without  first  giving  his  employer  thirty  days'  notice  of 
such  intention.  Such  a  measure  would  prevent  either  party 
from  being  taken  by  surprise,  as  often  now  happens.  By 
affording  time  for  reflection  and  discussion,  it  would  avoid 
much  ill  feeling,  as  well  as  pecuniary  losses  to  both  sides. 

OUGHT   EVERY    MAN   BE  ALLOWED   TO   DO   AS   HE 
PLEASE  ? 

In  the  outset  of  considering  what  measures  to  adopt  in 
order  to  create  and  preserve  the  proper  relations  between 
capital  and  labor,  the  question  arises  :  What  end  should 
be  sought  by  legislation  ? 

Much  affectation  of  "  science  "  is  made  by  the  advocates 
of  "free  trade  "  and  "  let  alone."  It  is  claimed  that  these 
doctrines  are  right  because  they  are  in  harmony  with  the 
great  natural  law  of  the  "  survival  of  the  fittest"  ;  and,  if  all 
legal  restraints  were  removed,  each  man  and  each  nation 
would  naturally  take  the  place  designed  for  him  or  it. 
These  persons  think  all  usury  laws  should  be  repealed,  the 
lender  allowed  to  charge  whatever  interest  he  can  get,  and 
that  no  tariffs  should  exist  to  protect  weak  manufacturers 
from  established  and  powerful  monopolies. 

Volumes  of  so-called  political  economy  have  been  written, 
based  on  the  idea  that  there  should  be  "  unrestricted  free- 
dom of  action  "  between  men  to  make  whatever  bargains 
could  be  made,  and  that  such  contracts  when  made  should 
be  enforced  by  the  whole  civil  and  military  power  of  the 
nation. 

The  principle  underlying  these  doctrines  ignores  all  moral 
obligations  of  one  man,  or  one  nation,  to  another.  It  is  the 
brute  idea  that  the  fact  of  one  man,  or  body  of  men,  having 
superior  mental,  physical  or  pecuniary  power  confers  on 
that  man,  or  that  body  of  men,  the  natural  right  to  use  that 


THE  GOSPEL  OF  ANARCHY. 


393 


power  for  his,  or  their  selfish  purposes,  regardless  of  the  suf- 
ferings thereby  inflicted  on  weaker  men  or  weaker  nations. 
If  this  principle  be  correct,  the  slave-holders  were  right.  For 
if  one  race  have  superior  power  to  another,  why  not  allow 
them  to  use  that  power  as  to  them  appear  best  for  their 
own  interests  ?  "  The  interests  of  the  weak  and  the  strong, 
of  labor  and  capital  are  identical.  Why  then  not  trust  the 
strong  to  do  as  they  tliink  best  ivith  the  iveak?  Why  not  let 
nature  take  her  course  ?  " 

A  shark  wants  "  unrestricted  freedom,"  as  he  under- 
stands it.  The  same  is  true  of  tigers  and  all  other  beasts  and 
birds  of  prey.  A  wolf  does  not  want  to  be  "  limited  "  to 
the  amount  of  mutton  necessary  to  a  meal — he  wants  "  un- 
restricted freedom  "  to  slaughter  and  suck  the  blood  of  a 
score  of  sheep  at  once.  Men  whose  superior  physical,  in- 
tellectual or  pecuniary  strength,  give  them  advantages  over 
their  fellows  are  prone  to  desire  "unrestricted  freedom," 
and  often  to  unconsciously  persuade  themselves  that  the 
doctrines  of  the  fishes  of  the  sea  are  true  political  economy- 
Carried  to  its  logical  conclusion,  the  doctrine  of  "  unre- 
stricted freedom  "  is  the  gospel  of  anarchy.  Its  advocates 
stop  at  what  they  call  the  "  police  line."  But  if  such  ideas 
be  true,  why  should  we  have  police  ?  Why  not  let  every 
one  take  care  of  himself  and  enforce  his  own  rights  without 
calling  on  others  for  help  ?  Why  should  a  person  holding 
such  views  call  on  the  civil  authorities  to  enforce  the  con- 
tracts he  may  have  made  with  others  ?  Furthermore,  if  a 
person  have  a  natural  right  to  "unrestricted  freedom"  has 
he  not  the  right  to  cancel  a  contract  whenever  he  thinks  his 
interest  would  be  promoted  by  so  doing  ? 

If  we  admit  these  notions,  it  follows  that  universal  suf- 
frage is  wrong.  A  few  men  should  be  allowed  to  seize  and 
hold  the  reins  of  power.  It  also  follows  that  a  strong  na- 
tion has  a  perfect  right  [as  England  has  repeatedly  done] 
to  reduce  weaker  nations  to  industrial,  commercial  and  pe- 
cuniary servitude.  It  further  follows  that  the  weaker  men 
and  nations  have  no  natural  right  to  use  such  defense  as 
may  be  had   by  legal  organization  or  by  combination  with 


394 


SOCIAL  STRUGGLES. 


each  other.  They  should  quietly  submit.  "  Why  were  some 
men  made  stronger  in  body  or  mind  than  others,  if  they 
have  no  right  to  use  their  strength  as  they  see  fit?" 

These  ideas,  incorporated  into  deeds  are,  in  fact,  a  return 
to  barbarism — to  the  selfish  principle  of  "  every  man  for 
himself."  It  is  none  the  less  so,  because  the  proposition  is 
to  spoliate  by  the  weapons  of  trade  and  law  instead  of  the 
old  method  of  open  robbery  by  physical  force.  Wealth 
got  by  usury  ;  by  legislative  changes  of  contracts,  such  as 
the  Coin  Act  and  the  demonetization  of  silver;  by  oppres- 
sive uses  of  capital  in  form  of  monopolies ;  or,  by  hard  bar- 
gains of  any  kind  wrung  out  of  the  necessities  of  those 
whose  circumstances  force  them  to  submit,  is  obtained  by 
the  same  spirit  which  actuated  the  petty  chiefs  of  the  Mid- 
dle Ages  when  they  sallied  forth  with  armed  retainers  to 
plunder  a  fertile  valley.  Robbery  by  the  means  "  respect- 
able "  in  the  nineteenth  century,  is  as  criminal  as  robbery 
by  the  modes  which  were  "  respectable  "  in  the  ninth  cent- 
ury. 

A   DANGEROUS   DOCTRINE   FOR   THE    RICH   TO   PREACH. 

At  first  sight,  it  seems  to  the  interest  of  the  rich,  the  cun- 
ning, the  strong  and  the  skillful  to  have  all  restraints  upon 
their  conduct  removed.  But  there  is  another  side  to  the 
doctrine  that  "  the  strong  should  be  free  to  follow  their  own 
instincts,"  and  that  it  is  best  to  "let  every  one  follow  and 
gratify  his  ambition  in  his  own  way."  The  moment  the 
doctrine  is  fully  established  and  understood  that  superior 
power  to  do  or  carry  out  a  particular  thing  or  policy  con- 
fers a  just  and  natural  right  on  such  person  or  persons  to  so 
act,  the  capitalists  of  the  country  are  in  immediate  danger 
of  having  their  property  taken  from  them  by  laws  backed 
by  physical  force.  The  number  of  the  rich  capitalists  is 
small  corripared  with  the  rest  of  the  population.  Suppose 
the  laboring  classes  should  say  to  them:  "You  say  that 
might  gives  right ;  we  accept  your  doctrine  and  challenge. 
Although  a  hundred  of  your  number  have  greater  resources, 
and  therefore  are  stronger  than  a  hundred  of  us,  yet  we  can 


THE  TRUE  DOCTRINE. 


395 


exceed  your  strength  by  a  combination  of  our  superior  num- 
bers. We  will  combine  at  the  polls  and  make  laws  which 
will  show  you  that  if  superior  strength  give  privilege, 
we  have  the  right  to  control  your  property,  just  as  you 
have  heretofore  controlled  our  labor." 

The  danger  of  the  doctrine  of  "  freedom  of  contract " 
between  man  and  man,  is  not  an  imaginary  one.  It  is  true 
there  is  no  danger  to  the  few  capitalists  who  act  on  such  a 
doctrine  so  long  as  the  masses  of  voters  can  be  hoodwinked 
by  false  cries,  as  they  have  often  been  heretofore.  But 
that  this  cannot  be  repeated  indefinitely  is  perfectly  certain. 
Sooner  or  later  the  laboring  classes  will  more  fully  under- 
stand their  power,  and  will  mostly  vote  as  a  class,  and  then 
the  evil  of  the  aforesaid  false  doctrines  will  appear  to  those 
who  now  exalt  them  into  high  moral  principles. 

The  true  doctrine  is  that  neither  power  of  wealth  nor 
power  of  numbers  should  be  used  to  perpetrate  wrong  or 
injustice  toward  any  person  or  class  whatsoever. 

"  These  things  I  conmiand yoii,  that  ye  love  one  another ^ 

WHAT   SHOULD    BE. 

Statistics  have  been  adduced  to  show  that  the  masses 
ought  not  to  complain  of  the  present  hard  times  because  a 
laborer  can  now  obtain  more  of  the  comforts  of  life  for  a 
week's  wages  than  he  could  fifty  years  ago.  But  why  stop 
at  fifty  years?  Compared  with  five  hundred  years  ago  the 
people  are  highly  prosperous  and  get  high  wages  to-day. 
Compared  with  the  dark  ages,  the  common  laborer  can  now 
live  like  a  prince ; — he  can  have  glass  in  his  windows; — can 
have  books,  newspapers,  and  a  hundred  other  things  which 
were  then  almost  unknown.  A  thrifty  mechanic  who  owns 
his  homestead  can  now  live  in  a  style  far  superior  in  many 
respects  to  that  of  Henry  VIII.  of  England. 

We  can  now  raise  wheat,  corn  and  other  farm  products 
with  less  labor  than  before  the  invention  of  the  present 
perfected  farming  implements ;  but  that  constitutes  no  rea- 
son why  the  profit  and  advantage  of  this  increase  of  knowl- 
edge should  go  to  a  few  rich  persons  instead  of  benefiting 


396 


SOCIAL  STRUGGLES. 


the  farmers  themselves.  We  can  manufacture  cloth  and  a 
great  number  of  other  necessaries  and  comforts  of  life  with 
more  ease  and  less  labor  than  was  formerly  required  to  make 
a  poorer  quality ;  but  that  forms  no  reason  why  the  ma- 
chinery of  to-day  should  benefit  only  a  few.  If  the  doc- 
trine that  the  masses  should  now  be  content  to  work  as  hard 
and  fare  as  rudely  and  poorly  as  their  ancestors  did  fifty  or 
a  hundred  years  ago,  be  true,  then  it  logically  follows  that 
they  should  be  willing  to  go  still  further  back;  to  return  to 
the  barbarism  when  mankind  lived  in  rude  huts,  were  clad  in 
the  skins  of  beasts,  had  none  of  the  comforts  of  civilization 
and  were  almost  destitute  of  education.  This  they  should 
be  contented  to  do,  in  order  that  a  favored  few  should  mo- 
nopolize all  the  results  of  the  toil  and  thought  of  a  hundred 
generations. 

RISE  OF  RENTS. 

More  of  many  of  the  various  necessaries  and  comforts  of 
life  can  be  bought  with  a  week's  wages  now  than  could  be 
had  for  the  same  labor  two  hundred  years  ago.  But  it 
is  also  true  that  as  a  general  rule  rent  costs  enormously 
more  now  than  then.  In  fact,  a  large  portion  of  the  aver- 
age workman's  wages  is  absorbed  in  payment  of  rent,  and 
this  goes  on  accumulating  against  him  when  he  is  idle.  The 
great  rise  in  the  value  of  land  in  cities  is  the  chief  cause  of 
crowded  tenements,  insufficient  light  and  air,  and  other 
evils.  Large  numbers  of  workmen  live  upon  land  for  which 
a  rent  must  be  paid  out  of  all  proportion  to  their  wages. 

The  question  is  often  asked  :  Why  do  not  the  workmen 
in  cities  live  in  the  suburbs  where  rent  is  cheaper?  Partly 
because  they  cannot  afford  to.  Most  workmen  cannot  begin 
work  at  nine  o'clock,  as  some  other  classes  do.  They  must 
be  at  their  place  at  seven  o'clock  in  the  morning,  and  remain 
until  six  in  the  afternoon.  The  cost  of  fare  and  time  would 
be  usually  greater  than  the  increased  rent  of  a  tenement 
nearer  the  workshop. 

The  problem  of  supplying  workmen  with  comfortable 
homes  at  a  moderate  cost,  from  which  their  work  can  easily 


NEED  OF  CHEAPER  RENT. 


397 


be  reached,  chiefly  involves  four  things.  First :  the  spread 
of  our  cities  over  larger  areas  of  land  ;  thus  moving  shops 
to  open  spaces  where  land  .is  cheap.  An  obstacle  to  this, 
and  a  very  serious  hinderance  to  better  social  and  sanitary 
conditions  among  mechanics  and  factory  operatives,  is  the 
fondness  of  many  of  them  for  living  in  the  most  central 
and  densely  populated  section  they  can  find.  Measures 
should  be  taken  to  discourage  the  herding  of  great  numbers 
within  narrow  areas,  and  to  encourage  the  supply  of  each 
family  with  abundance  of  air  and  sunshine.  These  agents 
disinfect  the  moral  as  well  as  the" physical  atmosphere. 

Second.  Greater  facilities  for  cheap  and  rapid  transporta- 
tion of  goods  and  passengers  from  one  portion  of  a  city  to 
another.  This  can  be  furthered  by  the  municipalities  mak- 
ing a  wiser  use  of  the  street  franchises. 

Third.  A  reduction  of  the  price  of  rent.  This  depends 
largely  upon  a  reduction  of  the  rate  of  interest  paid  for  the 
use  of  money.  Another  important  fact  is  that  the  rent  of 
the  cheapest  grade  of  tenements  would  be  from  ten  to  twenty 
per  cent,  lower,  if  their  occupants  would  learn,  as  far  as 
possible,  to  do  precisely  as  they  agree,  and  take  good  care 
of  their  landlord's  property. 

HOURS   OF   LABOR. 

Fourth.  Reduction  of  the  time  of  labor  to  nine  hours  a 
day.  This  would  be  allowing  a  half  hour  in  the  morning 
and  evening  for  the  workman  to  go  to  and  from  his  work. 
But  it  should  be  borne  in  mind  that  the  number  of  hours  a 
man  should  work  in  a  day  depends  somewhat  on  the  num- 
ber of  such  days'  labor  in  a  year.  Those  whose  labor  is 
uninterrupted,  month  after  month,  cannot  advantageously 
work  as  many  hours  in  one  day  as  those  who  have  frequent 
periods  of  idleness. 

The  total  amount  of  work  which  a  man  shall  perform  in  a 
day  and  the  number  of  hours  he  shall  be  engaged  in  labor 
are  two  distinct  things.  By  incessant  and  rapid  labor  for 
eight  hours  more  work  may  be  accomplished  than  by  more 
leisurely  labor  for  ten  hours  ;  and  the  strain  upon  the  phys- 


398 


SOCIAL  STRUGGLES. 


ical  strength,  of  the  laborer  occupied  for  ten  hours  may  be 
much  less  than  that  upon  him  compelled  to  severe  exertion 
for  eight  hours.  Therefore,  the  most  we  can  say  about  the 
relative  tax  on  a  laborer's  energies  from  working  eight  or 
ten  hours  per  day,  is  that,  other  things  being  equal,  ten  hours' 
labor  are  a  severer  tax  than  eight  hours'  labor.  Such  prob- 
lems, like  many  others,  depend  on  circumstances  and  facts 
for  their  proper  solution. 

If  a  man  must  do  a  certain  amount  of  work  in  a  day,  what 
number  of  hours  can  most  advantageously  be  devoted  to  its 
performance?  It  is  certain  that  the  total  amount  of  labor 
exacted  of  a  workman  daily  should  not  be  so  great  as  to  in- 
jure his  health,  or  his  reasonable  enjoyment  of  life.  This 
implies  moderate  labor  for  such  portion  of  time  as  will  leave 
him  ample  time  for  sleep  and  a  reasonable  opportunity  for 
recreation  and  self-improvement. 

A  reasonable  division  of  the  twenty-four  hours  is  nine 
hours'  labor,  nine  hours'  sleep,*  three  hours  for  meals  and 
incidental  time,  and  three  hours  for  recreation  and  improve- 
ment. If  such  a  system  be  followed  continuously  a  large 
amount  of  work  can  be  performed  in  a  year.  It  is  the' 
uninterrupted  labor  which  shows  the  greatest  results. 
Spasmodic  industry  produces  comparatively  little.  Of 
course,  such  a  division  of  time  is  entirely  impracticable  for 
farmers,  sailors,  and  many  other  classes  of  workmen  whose 
hours  of  labor  are  largely  dependent  on  the  vicissitudes  of 
the  weather  and  upon  the  peculiarities  of  the  work  to  be 
performed. 

COMPARISON   WITH   A   HUNDRED   YEARS    AGO. 

It  is  undoubtedly  true,  that  if  a  mechanic  earning  the 
average  wages  now  paid  were  to  live  in  the  style  mechanics 
lived  two  hundred,  or  one  hundred  years  ago,  he  could,  in  a 
few  years,  save   money  enough   to  buy  a  building  lot  and 

*  An  enormous  amount  of  insanity  and  various  other  forms  of  nervous 
disease  are  due  to  insufficient  sleep.  As  a  general  rule,  each  person 
should  have  all  the  time  for  sleep  that  he  is  able  to  sleep,  without  spe- 
cial reference  to  the  number  of  hours  so  occupied. 


CAUSE  OF  DISCONTENT. 


399 


erect  a  cottage  of  his  own.  But  those  who  point  this  out 
forget  that  the  man  of  to-day  is  surrounded  by  circum- 
stances entirely  different  from  those  which  environed  his 
ancestors.  An  ox  is  contented  when  he  has  plenty  of  food, 
drink  and  a  comfortable  shelter  from  the  cold.  What  other 
oxen  may  or  may  not  have  makes  no  difference  with  his 
contentment. 

A  man's  nature  differs  from  that  of  an  ox.  His  content- 
ment depends  as  much  upon  what  his  associates  have  as 
upon  what  he  has  himself.  Those  who  served  in  the 
civil  war  can  remember  the  many  times  when  thousands  of 
men,  accustomed  when  at  home  to  comfortable  and  luxu- 
rious quarters,  lay  down  to  sleep  in  the  mud,  or  on  the 
frozen  ground,  without  complaining  or  murmuring.  This 
was  largely  so  because  all  fared  alike.  If  part  of  the  army 
had  been  supplied  with  hair  mattresses,  resting  on  springs 
and  placed  in  warm  dry  rooms,  while  the  rest  lay  out  in  the 
snow  or  mud,  there  would  not  have  been  the  cheerful  resig- 
nation to  the  situation  that  there  was. 

If  a  mechanic  should  now  live  as  plainly  and  poorly  as 
his  ancestors  did  two  hundred  years  ago,  he  would  find  him- 
self in  a  very  uncomfortable  position.  His  house,  furniture, 
food  and  clothing,  and  his  wife's  and  children's  clothing, 
would  be  the  subject  of  constant  and  annoying  remarks. 
They  would  be  socially  ostracized  and  made  a  subject  of 
jeers  and  ridicule;  and  unless  constituted  differently  from 
the  majority  of  persons,  life  would  be  a  constant  round  of 
vexation  and  annoyance  to  them. 

It  does  not  allay  the  discontent  of  a  man  who  feels  that 
he  has  not  his  fair  share  of  the  growing  wealth  of  the  world, 
to  recite  to  him  the  different  ways  in  which  he  is  better  off 
than  his  ancestors  were.  He  has  a  feeling  that  his  ances- 
tors, in  one  important  respect,  were  far  better  off  than  he 
is :  viz.,  a  greater  equality,  in  style  of  living,  with  employers. 
Everything  in  this  world  is  compared  with  something  else. 
Therefore  it  is  futile  to  attempt  to  convince  mechanics  or 
laborers  that  they  are  fairly  dealt  with,  by  simply  pointing 
out  how  such  persons  formerly  fared.     Their  present  posi- 


400 


SOCIAL  STRUGGLES. 


tion,  compared  with  that  of  men  who  hved  one  or  two 
hundred  years  ago,  is  of  no  account  to  their  minds,  because 
it  is  live  vicu,  and  not  dead  ones,  with  whom  they  wish  to 
be  on  a  footing  of  greater  equahty. 

IS   EQUITY   BEING   DONE? 

The  question,  therefore,  is  not  whether  labor  gets  a 
greater  reward  now  than  it  formerly  did.  After  that  is 
conceded,  the  difficulty  is  as  great  as  ever.  Labor  insists 
that  capital  gets  more  than  its  relative  share  of  the  wealth 
created  by  combining  labor  and  capital  with  the  discoveries 
and  inventions  of  science  and  art.  If  this  be  true,  then  it 
follows  that  labor  is  being  defrauded  of  its  just  share  in 
the  glorious  progress  of  the  human  race. 

It  must  be  remembered  that  our  social  and  legal  policy 
should  be  framed  on  the  maxim  that  justice  is  always  ex- 
pedient. The  permanent  interests  of  capital  are  safe,  just 
in  proportion  as  labor  is  equitably  rewarded. 

We  should  seek  the  advancement  of  HUMANITY ; — not 
simply  that  of  a  few,  but  of  the  HUMAN  RACE.  The  enor- 
mous progress  we  have  made  in  science,  invention,  and  me- 
chanical art  and  skill,  is  rightfully  the  heritage  of  the  WHOLE 
PEOPLE;  it  should  be  used  for  elevating  the  masses  by  light- 
ening the  burden  of  drudgery — providing  more  physical 
comforts  and  better  sanitary  conditions ;  and  by  affording 
more  leisure,  opportunity  and  means  for  intellectual  im- 
provement. 

It  is  sound  public  policy  to  encourage  industry  and  the 
accumulation  of  wealth.  Those  who  are  lazy,  improvident 
and  wasteful  should  suffer  the  natural  result  of  bad  con- 
duct. But  at  the  same  time,  we  should  create  the  same 
checks  to  prevent  an  unscrupulous  and  inordinate  use  of  the 
money-making  power  that  we  have  already  placed  on  the 
misuse  of  physical  power. 


FREE  CONTRACTS. 


401 


FREE   TRADE   IS   POSSIBLE  ONLY   WHEN   BOTH   PARTIES 
HAVE   LIBERTY   OF   CHOICE. 

Many  persons  suppose  that  a  bargain  is  voluntary,  when 
made  without  either  party  thereto  being  under  compulsion 
from  some  threatened  legal  penalty  or  some  form  of  phys- 
ical violence.  Such  a  contract  is  presumed  to  be  a  "  free 
trade,"  mutually  advantageous  to  both  parties,  with  which 
it  is  both  impolitic  and  wrong  for  Government  to  interfere. 

But  very  little  investigation  is  required  to  discover  that 
one  man  may  compel  another  to  make  a  grossly  unjust  bar- 
gain, without  exercising,  or  threatening  either  legal  or  phys- 
ical force.  And  this  may  be  done  either  when  commodities 
are  bartered,  when  goods  are  bought  and  sold  for  money, 
or  when  labor  is  hired.  A  makes  an  unfair  bargain  when- 
ever he  uses  the  peculiar  relations  which  he  bears  to  B,  for 
the  purpose  of  getting  the  money,  the  goods,  or  the  labor 
of  B  for  a  much  smaller  equivalent  than  would  have  had  to 
be  given  if  B  were  not  crippled  by  circumstances  which 
placed  him  at  a  great  disadvantage.  It  may  be  more  ad- 
vantageous to  B,  to  make  such  a  bargain,  than  to  bear  the 
losses  and  suffering  unavoidable  in  case  no  such  bargain 
were  made  ;  but  this  fact  may  exist  and  still  the  bargain 
be  grossly  unfair  and  oppressive  to  B. 

The  manufacturers  of  a  city  are  making  fair  profits  at  the 
existing  scale  of  prices  and  wages.  Suppose  under  those 
circumstances  they  combine  and  suddenly  reduce  the  wages 
of  operatives  five  per  cent.  Such  a  reduction  may  appear 
insignificant,  but,  in  the  aggregate,  where  thousands  of  hands 
are  employed,  it  makes  a  great  difference  in  the  manner  the 
wealth  created  by  them  shall  be  distributed.  In  such  case, 
it  may  be  said  that  if  the  workmen  are  not  satisfied  they 
are  "  free  "  to  get  employment  elsewhere.  But  although 
nominally  such  freedom  exists,  the  workmen  have  not  a  per- 
fect liberty  of  choice.  A  large  number  of  them  have  no 
alternative  employment  and  lack  the  means  to  remove  them- 
selves and  families  to  another  place.  Even  those  who  are 
able  to  emigrate  cannot  do  so  without  leaving  associates 
26 


402 


SOCIAL  STRUGGLES. 


and  friends.  Furthermore,  the  expense  of  traveling  in 
quest  of  employment,  and  of  removal  after  it  is  found  may- 
be a  greater  loss  than  the  reduction  of  wages. 

HOW   WORKMEN   MAY   ROB   EMPLOYERS. 

On  the  other  hand,  circumstances  may  and  often  do  exist 
in  which  workmen,  already  in  receipt  of  fair  wages,  may 
combine,  and,  without  an  hour's  notice,  demand  an  increase 
of  ten  per  cent,  or  more  in  their  wages.  The  manufactur- 
ers have  then  two  alternatives  presented  to  them,  either  one 
of  which  involves  not  merely  a  loss  of  possible  profits  but 
an  actual  loss  of  accumulated  capital.  If  the  workmen's 
demands  are  not  acceeded  to,  and  the  factory  consequently 
closed,,  there  is  a  loss  of  the  interest  of  the  capital  invested  in 
buildings  and  machinery,  and  a  serious  damage  to  business 
from  its  interruption.  When  the  manufacturer  is  heavily 
in  debt,  as  is  often  the  case,  these  losses  are  very  hard  to 
bear.  If  the  manufacturer  conclude  that  the  additional 
wages  demanded  will  damage  him  less  than  to  stop  work, 
he  is  then  also  certain  to  lose  from  two  causes :  the  addi- 
tional wages  and  the  inability  to  fully  compete  with  other 
firms,  situated  in  places  at  a  distance  where  wages  have  not 
been  raised. 

Suppose  the  hired  farm  laborers  in  a  wheat-raising  sec- 
tion of  the  country  should  quietly  keep  at  work  until  the 
wheat  was  fully  ripe  and  then  demand  double  the  usual  har- 
vest wages.  The  farmers  would  pay  it  because  they  would 
otherwise  lose  still  more  than  the  extorted  wages.  But 
would  this  be  a  free  contract  ?  Would  any  bargain  or  trade 
made  under  similar  circumstances  be  "  voluntary  "  in  the 
proper  sense  of  the  term  ? 

WHEN  FREE  TRADE  OCCURS. 

Freedom  of  contract  and  trade,  alike  between  individuals 
and  nations,  is  only  possible,  as  a  general  rule,  when  both 
parties  occupy  ground  and  positions  which  give  them  a 
reasonable  equality  of  strength,  and  power  of  self-protec- 
tion.    Neither  an  individual  nor  a  nation  has  much  chance 


SOURCE  OF  LAW. 


403 


to  make  an  equitable  bargain  when  in  urgent  necessity  of 
making  one  on  some  terms.  The  proverb,  "  Necessity 
never  makes  a  good  bargain,"  is  a  condensed  statement  of 
human  experience  in  regard  to  trades  and  contracts  made 
when  one  of  the  parties  has  a  great  advantage  in  some  way- 
over  the  other. 

When  both  parties  to  a  bargain  of  any  kind,  are  benefited 
thereby  to  nearly  an  equal  extent,  the  exchange  is  both  free 
and  fair.  But  where  one  side  gets  nine-tenths  of  the  profit 
of  the  transaction,  and  the  one-tenth  profit  to  the  other  side 
is  profit  only  in  the  sense  that  it  is  a  means  of  averting  a 
portion  of  an  expected  loss,  neither  a  free  trade  nor  a  fair 
trade  has  been  accomplished.  Such  a  bargain  is  evidence 
that  one  of  the  parties  thereto  had  "  liberty  t)f  -choice  and 
action  "  only  in  the  narrow  sense  that  he  could  choose  be- 
tween one  sacrifice  and  another  and  a  still  greater  one. 

WHAT  A  GOOD   BARGAIN  IS. 

As  a  general  rule,  both  individuals  and  nations  in  their 
dealings  are  constantly  endeavoring  to  gain  an  unfair  advan- 
tage over  each  other.  What  is  commonly  called  "  a  good 
bargain  "  is  usually  an  exchange  wherein  the  advantage 
thereof  is  nearly  all  on  one  side.  Trade  and  commerce  are 
not  carried  on  from  benevolent  motives. 

LAWS  ARE   OUTGROWTHS   OF   HUMAN  NECESSITY. 

Law  originated  because  human  experience  saw  the  abso- 
lute necessity  of  some  orderly  means  of  restraining  the  cu- 
pidity and  selfishness  of  mankind.  Laws  are  therefore  sim- 
ply an  expression  and  outgrowth  of  public  necessity.  It  is 
practically  impossible  for  a  government  to  inquire  into  the 
right  and  wrong  of  every  transaction  which  occurs  between 
the  different  individuals  under  its  jurisdiction.  It  is  like- 
wise impracticable  for  it  to  take  cognizance  of  all  the  bar- 
gains made  between  its  own  citizens  and  the  citizens  of  for- 
eign nations.  But,  at  a  very  early  period  in  the  history  of 
our  race,  the  need  became  apparent  of  adopting  some  gen- 
eral measures  the  tendency  of  which  would  be  to  prevent 


404 


SOCIAL  STRUGGLES. 


one  man  from  taking  advantage  of  the  necessities  of  another 
to  make  with  him  a  grossly  unfair  bargain.  Out  of  this 
belief  grew  the  first  laws.  It  was  next  observed  that  simi- 
lar measures  were  necessary  to  prevent  foreigners  from  un- 
fair dealings  with  citizens.  This  was  the  germ,  at  once,  of 
the  first  international  law  and  the  first  tariff.  For  century 
after  century,  these  rudimentary  ideas  have  slowly  developed 
into  systems  of  jurisprudence,  and  have  found  expression  in 
a  great  variety  of  ever  changing  laws.  The  wisdom  and 
expediency  of  the  form  of  many  of  these  laws  are  still  under 
active  debate.  But,  that  it  is  as  legitimate  a  function  of 
government  to  prevent  unfair  bargains  as  to  prevent  robbery 
or  burglary,  is  a  principle  fully  established.  The  only  ques- 
tion is  :  What  are  the  best  practical  means  of  accomplishing 
such  a  purpose?  What  measures  should  be  adopted,  at  a 
given  time  and  place,  to  promote  and  secure  freedom  of 
contract  and  fair  dealing  between  citizen  and  citizen  and  be- 
tween citizen  and  foreigner,  depends  entirely  on  the  at- 
tendant circumstances  and  conditions.  Laws  wise,  suitable, 
and  effectual  in  one  age  and  country,  and  under  one  combi- 
nation of  facts,  may  be  at  once  foolish  and  futile  at  another 
time  or  place  and  under  different  circumstances.  Laws 
made  without  reference  to  existing  conditions  are  always 
acts  of  folly,  and  usually  acts  of  injustice ;  simply  because 
the  paramount  end  of  legislation  can  never  be  reached  un- 
less the  law  fits  the  facts.  Facts  cannot  usually  be  made 
to  fit  either  newly-made  laws,  or  laws  made  long  before  and 
under  a  different  state  of  affairs. 

SIEGE   OF  PARIS. 

A  striking  illustration  of  the  foregoing  principles  was  fur- 
nished a  few  years  ago  by  the  siege  of  Paris.  The  prices  of 
fuel,  flour,  and  other  necessaries  of  life  in  that  city  are  usu- 
ally left  to  the  action  of  competition  in  open  market  between 
the  owners  of  those  things.  But,  when  the  German  armies 
encircled  the  city,  it  was  at  once  evident  that  the  different 
conditions  necessitated  a  different  means  of  regulating  prices. 
The  Government  fixed  prices  by  law.      Otherwise,  those  who 


77?^^   TEST  OF  LA  IVS. 


405 


chanced  to  have  in  possession  a  large  stock  of  imperatively 
needed  articles  could  have  taken  advantage  of  the  situation 
to  obtain  unfair  prices.  The  laws  adapted  to  the  ordinary- 
times  of  peace  were  not  suitable  when  the  city  was  placed 
under  different  circumstances. 

WHEN   LAWS  NEED   REVISION.  ' 

It  may  be  said  that  a  siege  is  an  exceptional  thing.  But, 
in  fact,  the  principles  involved  when  a  change  of  circum- 
stances occurs  in  a  sharp,  vivid  manner  do  not  differ  from  the 
principles  which  should  guide  us  when  circumstances  change 
so  slowly  as  to  attract  little  attention  from  ordinary  observers. 
It  is  the  fact  of  a  change  of  conditions  which  is  the  just  basis 
of  a  corresponding  change  of  measures  to  secure  fair  bar- 
gains. Whether  this  change  has  been  rapid  or  gradual  in 
itself,  is  immaterial.  The  vital  point,  which  justifies  legal 
interference,  is  that  events  have  caused  such  a  divergence 
between  existing  laws  and  facts  that  the  object  of  law  is  no 
longer  attained. 

TEST   OF   THE   WISDOM    OF   A   LAW. 

The  wisdom  and  justification  of  a  law  intended  to  prevent 
one  man  from  taking  advantage  of  his  position  to  make  a 
nominally  "  free,"  but  really  compulsory  bargain  with  an- 
other man  depends  on  its  fulfillment  of  such  a  purpose.  If 
it  does  not  tend  to  do  so,  no  further  evidence  of  its  want  of 
adaptation  to  existing  facts  is  needed.  If  it  have  such  a  tend- 
ency, its  value  is  not  impaired  because  adverse  to  the  theory 
that  "  every  man  has  a  right  to  make  such  bargains  as  he 
pleases."  Such  an  inherent  right  does  not  exist.  Individ- 
ual liberty  must  always  be  subordinated  so  the  general  good 
of  society,  and,  consequently,  one  man  has  no  right  to  com- 
mit acts,  even  with  his  own  property,  which  are  contrary  to 
public  policy. 

What  is  true  in  regard  to  the  regulation  of  trade  between 
citizens  of  the  same  country,  is  equally  true  in  regard  to 
trade  with  foreigners.  Tariffs  and  similar  measures  are  jus- 
tifiable when  they  prevent  citizens  of  one  nation  from  tak- 


406  SOCIAL  STRUGGLES. 

ing  advantage  of  their  position  to  make  unfair  trades  with 
the  citizens  of  another  nation.  Such  trades  may  be  nomi- 
nally  "  free  "  ;  yet,  Hke  many  bargains  between  citizens  of 
the  same  nation,  they  maybe  in  reality  compulsory  and  con- 
trary to  the  interests  of  one  of  the  nations. 

Whether  a  nation  needs  a  tariff,  and,  if  so,  upon  what  arti- 
cles and  at  what  rate,  depends,  like  the  enactment  of  other 
laws,  upon  the  existing  circumstances.  It  may  be  to  the 
interest  of  one  nation  to  have  no  tariff  whatever  upon  certain 
articles.  At  the  same  time,  another  nation  may  find  great 
advantage  from  placing  a  tariff  on  the  very  thing  which 
elsewhere  is  admitted  free  of  duty.  The  wisdom  and  justice 
of  an  act  always  depend  upon  the  circumstances  and  condi- 
tions under  which  it  is  committed.  Tariffs  are  not  excepted 
from  this  universal  law.  The  imagined  "  profound  and 
complex  economic  laws"  underlying  foreign  trade  vanish 
into  idle  vagaries  whenever  we  clearly  remember  that  bar- 
gains between  nation  and  nation  need  regulation  for  the 
same  reasons  that  bargains  between  one  man  and  another 
need  legal  supervision  ;  and,  therefore,  the  same  principles 
apply  to  one  that  apply  to  the  other :  to  wit,  A  should 
be  hindered  from  using  his  peculiar  position  to  make  an 
unjust  trade  with  B  which  could  not  be  made  if  B  were  not 
forced  by  circumstances  to  make  one  sacrifice  to  avert  a  still 
greater  one. 


CHAPTER  XVIII. 

Remedies  for  Social  Conflicts. — Legislation  should  Foster  Equality  of 
Wealth. — Measures  should  be  General,  in  Preference  to  Special. — 
Potency  of  Money. — Evils  of  Waste. — Foolish  and  Wasteful  Brutal- 
ity.—  Bad  Modes  of  Building. — Many  kinds  of  Waste. — Taxation. — - 
How  Taxes  should  be  Levied. — What  a  Tariff  is. — Taxation  should 
always  be  Laid  with  a  Twofold  Purpose. — Advantages  of  Indirect 
Taxation. — Corporations. — One  of  the  main  Roots  of  the  Labor  Ques- 
tion.— Ownership  of  whatever  performs  Labor  is  Ownership  of  La- 
bor.— A  Fish-hook  Machine. — A  Man  should  Control  his  Means  of 
Subsistence. — Need  of  a  large  Amount  of  Capital. — Inventions 
should  not  be  made  Means  of  Oppression. — How  Inventions  are 
Made. — All  should  be  Benefited  by  Discoveries  and  Inventions. — ■ 
Growth  of  Inequality. — What  should  be  Done. 

Nothing  is  more  fallacious  than  the  assumption  that  the 
mutual  interests  of  a  landlord  and  a  tenant,  a  lender  and  a 
borrozver,  a  seller  and  a  buyer,  and  an  employer  and  a  servant, 
are  coincident  and  identical. 

The  details  of  measures  to  adjust  the  business  relations 
of  one  person  with  another,  and  to  equitably  settle  the 
diverse  claims  of  capital  and  labor,  do  not  lie  within  the 
scope  of  our  present  inquiries.  But  the  general  principles 
which  should  direct  their  formation  may  be  briefly  dis- 
cussed. 

"  Give  me  neither  poverty  nor  riches ;  feed  me  with  food  convenient 
for  me  :  Lest  I  be  full  and  deny  thee,  and  say,  who  is  the  Lord  ?  or  lest 
I  be  poor  and  steal,  and  take  the  name  of  my  God  in  vain." 

This  ancient  prayer  regarding  the  distribution  of  wealth 
should  underlie  our  legislation.  And  we  must  remember 
that  the  laws  of  a  nation,  more  than  any  other  one  agency, 
determine  into  whose  hands,  and  in  what  proportion,  the 
wealth  of  that  nation  shall  be  placed. 

407 


4o8 


SOCIAL  STRUGGLES. 


LEGISLATION   SHOULD    FOSTER  EQUALITY  OF  WEALTH. 

The  chances  of  national  security,  prosperity,  and  happi- 
ness are  much  greater  for  a  country  where  the  vast  majority 
are  in  comfortable  circumstances,  than  for  a  nation  with 
great  wealth  in  few  hands  and  a  large  population  of  paupers 
and  other  persons  deprived  of  many  comforts  of  life  and  on 
the  verge  of  abject  want. 

In  order  to  produce  this  desirable  condition  of  equality 
in  enjoyment  of  the  necessaries  of  life,  the  social  forces  and 
national  policy  should  be  so  organized  and  directed  as  to 
restrain  the  avarice  of  those  who,  in  the  absence  of  law, 
would  appropriate  to  themselves  a  greater  amount  of  wealth 
than  either  justice  or  expediency  sanction. 

Laziness  and  Avastefulness  should  be  discouraged  and 
incentives  given  to  economy  and  thrift.  Every  citizen,  no 
matter  how  weak,  ignorant,  poor  or  humble  he  may  be, 
should  be  made  to  feel  that,  although  individuals  may  seek 
to  oppress  and  wrong  him,  yet  society,  as  a  whole,  the  State, 
expressed  by  the  strong  arm  of  legislation,  is  ever  his  kind 
and  sympathizing  friend.  Under  such  conditions  social 
order  rests  on  the  broad  foundation  of  the  affection  and 
loyalty  of  the  masses  of  the  population  and  cannot  be 
shaken. 

MEASURES     SHOULD     BE     GENERAL,     IN     PREFERENCE     TO 

SPECIAL. 

In  devising  means  to  accomplish  the  aforesaid  desired 
results,  we  should  draw  a  lesson  from  Nature  and  imitate 
her  mode  of  law-making.  Her  laws  are  neither  petty,  spe- 
cial nor  complex.  They  are  broad,  general  and  simple. 
Our  limited  capacity  prevents  us  from  ever  equaling  their 
wisdom ;  the  best  we  can  do  is  to  be  guided  by  the  general 
ideas  upon  which  natural  laws  appear  to  rest;  viz.,  funda- 
mental facts  and  principles  should  be  so  conformed  to,  that 
a  few  laws  will  enable  multitudes  of  living  things  to  success- 
fully accommodate    themselves   to    an   infinite   variety   of 


A  FEW  THINGS  GOVERN  MANY.  4O9 

changing  conditions.  The  Creator  of  natural  laws  has 
solved  this  problem  completely. 

Whoever  inspects  a  large  workshop  may  see  a  great 
number  and  variety  of  machines  performing  different  acts 
and  services.  Suddenly  the  hum  ceases,  and  in  a  few  mo- 
ments all  the  complex  mechanism  is  at  rest.  A  slight  pres- 
sure by  a  single  hand  has  detached  the  power  which  turned 
the  shaft  whose  motion  set  a  hundred  machines  at  work. 

The  social  fabric  is  like  a  workshop.  A  great  variety  of 
results  flow  from  the  action  and  influence  of  a  few  elemen- 
tary forces.  The  whole  social  system  may  thus  be  swayed, 
so  silently  and  quietly,  either  for  good  or  for  evil,  that  the 
source  of  the  power  which  has  such  a  controlling  influence 
is  unnoticed.  The  relations  of  capital  and  labor  are  so  com- 
plex and  numerous  that  most  persons  imagine  a  multitude 
of  regulations  necessary  to  secure  their  proper  adjustment. 
But  many  things  depend  largely  upon  the  influence  exerted 
by  a  few.  Therefore,  we  should  devote  our  studies  to  the 
regulation  of  those  few  things  which  give  a  controlling  bias 
and  tendency  to  the  many  things.  Some  of  these  rudimen- 
tary forces  we  will  indicate  in  the  order  of  their  relative 
importance. 

POTENCY  OF   MONEY. 

First.  In  the  absence  of  barter,  money  is  the  link  by 
which  capital  and  labor  are  associated.  As  the  growth  of 
commerce  and  commercial  habits  have  rendered  barter  to  a 
large  ex-tent  impracticable,  the  relations  of  labor  and  capital 
are  dependent  more  upon  money  than  upon  any  other  one 
thing,  A  currency  convenient  to  use,  difficult  to  counter- 
feit, and  of  uniform  value,  therefore,  lies  at  the  very  foun- 
dation of  commercial  and  industrial  activity.  The  ideal 
"dollar"  never  changes  in  value.  The  class  that  controls 
the  money  of  a  nation  can  control  and  order,  to  a  large  ex- 
tent, how  the  wealth  created  by  the  association  of  capital 
and  labor  in  that  nation  shall  be  divided  and  apportioned. 
This  silent  and  generally  unnoticed  influence  can  be  used  in 
two  different  ways,  or,  by  both  those  means  simultaneously. 


^lO  SOCIAL  STRUGGLES. 

First.  It  may  be  done  by  raising  or  lowering  prices.  Sec- 
ond. It  may  be  accomplished  by  changes  in  the  rate  of  in- 
terest. The  rate  of  interest  paid  for  the  use  of  money  is 
therefore  closely  interwoven  in  importance  with  stability  of 
the  purchasing  power  of  money.  These  topics  are  else- 
where considered  and  need  not  be  here  further  dwelt  on. 

EVILS   OP""   WASTE. 

Second.  A  cow  that  gives  a  pailful  of  milk  and  immedi- 
ately kicks  it  over  is  not  a  desirable  member  of  a  dairy. 
Wealth  squandered  as  soon  as  created  differs  widely  in  effect 
upon  the  community  from  wealth  put  to  good  and  produc- 
tive use.  If  a  political  party  squander  a  comparatively 
small  sum  the  whole  country  is  aroused.  But  the  millions 
of  individuals  who  compose  this  nation  are  constantly  en- 
gaged in  wasting,  in  a  great  variety  of  ways,  more  wealth 
annually  than  is  required  to  defray  the  entire  expenses  of  the 
national  government.  And  yet  this  colossal  waste  attracts 
less  public  attention  than  would  be  given  to  a  political  party 
which  should  be  convicted  of  wasting  two  millions  of  dollars. 

The  manufacture  and  sale  of  intoxicating  liquors  involves 
an  annual  waste  of  hundreds  of  millions  of  dollars'  worth  of 
property.  The  loss  inflicted  by  converting  valuable  grain 
into  maddening  drinks  is  alone  very  great  :  but  that  is  only 
the  first  of  a  series  of  acts  each  one  of  which  has  a  terrible 
tendency  to  make  more  inmates  for  the  almshouse,  the  luna- 
tic asylum,  the  police  station,  and  the  penitentiary.  A  large 
portion  of  the  expense  of  maintaining  order,  especially  in 
cities,  is  due  to  the  almost  incredible  amount  of  wealth 
wasted  in  various  ways  by  drinking  habits. 

FOOLISH  AND  WASTEFUL  BRUTALITY. 

Tens  of  millions  of  dollars'  worth  of  grain,  fruit,  and  veg- 
etables are  yearly  destroyed  by  insects  and  worms.  This  is 
chiefly  due  to  the  fact  that  every  village  and  city  in  the 
land  has  one  or  more  workshops  devoted  to  the  manufact- 
ure, repair,  and  sale  of  guns,  chiefly  used  for  the  purpose  of 
murdering  the  farmer's  and  gardener's  friends,   the  insect- 


WASTEFULNESS. 


411 


eating  birds.  An  undeveloped,  crude  boy,  without  proper 
instruction,  cannot  be  expected  to  know  any  better  than 
to  commit  acts  both  brutal  and  wasteful.  But  it  is  humil- 
iating to  read  that  persons  of  mature  age  and  occupying 
prominent  positions  in  society  are  "  spending  their  vaca- 
tions in  the  sport  of  hunting."  This  means  that  such  per- 
sons are  so  low  in  the  scale  of  moral  development  and  sensi- 
bility that  they  take  a  savage  pleasure  in  witnessing  the 
death  agonies  and  struggles  of  innocent  birds  and  animals. 
Large  sums  are  yearly  squandered  for  equipments  to 
carry  on  this  barbaric  "  sport." 

BAD   MODES   OF   BUILDING. 

Every  day  in  the  year  witnesses  the  destruction,  by  fire, 
of  from  one,  to  three  hundred  thousand  dollars'  worth  of 
property.  A  large  portion  of  this  is  needless  waste,  caused 
by  ignorant  and  careless  modes  of  constructing  buildings. 
Since  the  termination  of  the  Civil  War,  the  value  of  the 
property  destroyed  by  fire  exceeds  the  present  amount  of 
national  debt,  and  three-fourths  of  this  vast  waste  could 
have  been  averted  by  reasonable  precautions. 

We  have  wasted  and  are  still  wasting  our  wood  and  timber 
supply  with  utter  recklessness.  The  direct  loss  thereby  oc- 
casioned is  very  large,  but  it  is  equaled  if  not  exceeded  by 
the  enormous  losses  from  disastrous  floods  and  protracted 
droughts  directly  traceable  to  a  diminution  of  the  proper 
amount  of  forests.  We  not  only  squander  our  wealth  of 
forests  already  mature,  but  thus  far  have  neglected  to  ade- 
quately protect  young  growing  woodland  from  devasta- 
tion by  fire. 

MANY   KINDS   OF  WASTE. 

A  score  of  other  forms  of  wastefulness  could  readily  be 
named,  each  one  of  which  places  a  heavy  and  needless  burden 
upon  society.  On  the  average,  they  make  life  just  as  much 
harder  as  they  destroy  wealth.  Any  cause  which  checks  or 
diminishes  the  production  of  wealth  is  a  waste  of  potential 
energy  :  it  is  just  as  truly  wasted  wealth  as  if  it  were  a  means 


^12  SOCIAL  STRUGGLES. 

whereby  wealth  already  in  hand  was  destroyed.'^  Consider 
the  enormous  losses  inflicted  on  society  by  ill-advised  strikes, 
whereby  both  employer  and  employed  are  injured,  and  which 
a  little  consideration  on  one  or  both  sides  would  have  avoid- 
ed: arbitrary  and  unnecessary  discharges  of  workmen,  or 
some  similar  evidence  that  our  social  machinery  is  defective. 
For  it  should  be  remembered  that  whenever,  from  any  osten- 
sible and  apparent  cause  whatsoever,  men,  willing  and  able 
to  work,  are  idle,  it  necessarily  implies  grave  mistakes  some- 
where. Wasteful  ignorance  on  the  part  of  some  one,  some 
class,  or  the  whole  community,  must  always  exist,  in  some 
form  or  place,  whenever  hands  are  idle  which  should  be 
employed  in  the  creation  of  wealth.  Something  is  wrong 
whenever  the  association  of  capital  and  labor  is  not  both 
equitable  and  uninterrupted. 

After  strenuous  opposition  and  exhaustive  debate,  it  is  now 
generally  considered  a  legitimate  function  of  Government  to 

*  While  this  is  being  revised,  wastefulness  has  assumed  a  phase  to 
which  the  term  "  boycott  "  has  been  applied.  It  is  essentially  an  agreement 
by  a  considerable  number  of  persons  to  injure  the  business  and  property  of 
one  person  by  refusing  to  trade  with  or  work  for  him.  The  effectual  ac- 
complishment of  this  purpose  requires  that  the  persons  entering  into  such 
agreement  should  also  refuse  to  hold  any  business  relations  with  any  one 
Vho  has  commercial  intercourse  with  the  person  whose  injury  has  been 
agreed  upon.  Centuries  of  human  experience  have  demonstrated  the  in- 
estimable benefit  of  a  provision  in  the  fundamental  law  that  "  no  one 
shall  be  deprived  of  life,  Hberty  or  property  without  due  process  of  law." 
Boycotting  is  in  direct  contravention  of  the  long-tried  principle  that  every 
one  is  entitled  to  an  opportunity  to  make  a  full  defense  in  a  fair,  legal  and 
public  trial,  in  presence  of  his  accusers,  before  being  sentenced  to  depriva- 
tion of  life,  liberty  or  property.  It  is  a  species  of  lynch  law,  by  which  a 
person's  property  is  taken  from  him  through  the  indirect  method  of  in- 
juring his  business.  The  rule  of  conduct  is  essentially  the  same,  whether 
a  number  of  persons  agree  to  take  a  man's  property  by  mob  violence,  or 
whether  they  agree  to  take  his  property  from  him  through  indirect 
methods.  Lawlessness  is  the  characteristic  feature  of  all  such  acts. 
Boycotting  may,  therefore,  be  dismissed  as  an  effort  to  improve  the 
condition  of  the  laboring  classes  by  means  at  once  so  inexpedient  and 
wrongful  as  to  infiict  swift  and  certain  injury  upon  both  those  who  make 
it  and  those  against  whom  it  is  directed.  The  common  sense  of  the 
whole  community  will  soon  revolt  against  it. 


NEED  OF  GREATER  ECONOMY.  413 

foster  and  promote  the  diffusion  of  the  knowledge  and  skill 
which  will  increase  the  productive  capacity  of  the  various 
wealth-creators  of  the  nation.  Does  it  not  then  logically 
follow,  that  Government  should  also  take  measures  to  instruct 
the  people  how  to  preserve  and  utilize  wealth  after  it  is  cre- 
ated ?  Ought  we  not  to  take  another  step  in  the  path  we 
have  been  traveling  ?  Our  educational  system  would  be  im- 
proved, if  in  every  high-school,  academy  and  college  one  of 
the  "  professors"  of  some  comparatively  useless  department 
were  dismissed  and  his  place  filled  by  a  teacher  with  common 
s^nse  and  attainments  sufficient  to  instruct  the  pupils  in  the 
principles  and  art  of  economy. 

TAXATION. 

In  the  aggregate,  an  enormous  sum  of  money  is  annually 
drawn  from  the  pockets  of  the  people  in  form  of  taxes. 
Within  the  lifetime  of  a  man  who  attains  three  score  and 
ten,  the  major  portion,  and  in  many  cases  his  entire  estate, 
passes  through  the  hands  of  the  tax-collector.  That  is,  the 
total  amount  of  taxation  levied  upon  one  thousand  dollars' 
worth  of  property  during  his  life  equals  that  sum.  It  is 
certainly  a  moderate  statement  to  say  that  the  total  of  direct 
and  indirect  taxes  levied  on  a  nation  during-a  hundred  years 
equals  the  value  of  all  the  property  in  that  countr}^  Taxa- 
tion, therefore,  is  a  force  of  perpetual  and  enormous  power. 
Its  effect  for  a  single  year  is  not  perceptible  ;  but,  when 
levied  in  a  particular  direction,  with  a  view  to  carrying  out  a 
certain  policy,  the  tendency  it  exerts  during  a  series  of  years 
is  tremendous.  It  was  the  mode  of  taxation  in  France  for 
a  long  time  before  the  Revolution  of  1789  which  finally 
drove  the  masses  of  the  people  to  desperation. 

HOW   TAXES   SHOULD    BE   LEVIED. 

The  ancient  idea  of  levying  taxes  was  "  for  revenue 
only,  "  without  reference  to  the  incidental  effect  of  such  taxa- 
tion. This  is  the  barbaric  idea.  But  it  is  yearly  more  fully 
seen  that  taxation  should  have  a  twofold  object  ;  viz.,  the 
collection  of  revenue  and  the  encouragement,  or  discourage- 


414 


SOCIAL  STRUGGLES. 


ment,  of  certain  conduct.  Taxation  is  thus  made  a  legisla- 
tive force  ;  the  tax-office,  a  branch  of  Government.* 

All  laws  are  attempts  to  promote  a  particular  kind  of  con- 
duct and  to  discourage  the  commission  of  certain  specified 
acts.  These  laws  are  always  more  or  less  evaded.  For  in- 
stance, we  have  laws  against  theft  ;  but  it  is  continually  oc- 
curring. 

The  wisest  laws  cannot  prevent  crimes.  But  their  tendency 
is  to  make  such  offenses  more  rare  than  they  otherwise 
would  be.  Petty  theft  was  formerly  punished  by  hanging. 
But  because  experience  has  shown  said  policy  unwise,  it  does 
not  therefore  follow  that  all  penalties  against  theft  should  be 
abolished. 

In  order  to  discourage  men  from  committing  certain  acts 
called  "  crimes "  we  affix  a  penalty  to  their  commission. 
This,  for  nearly  all  crimes,  is  imprisonment.     But,  in  many 

*  False  and  misleading  issues  are  raised  by  constant  reiteration  and 
amplification  of  the  proposition  :  "  Taxation  should  be  no  greater  than 
requisite  for  payment  of  the  necessary  expenses  of  government."  But 
concession  of  the  absolute  truth  of  said  proposition  leaves  untouched  the 
actual  questions  before  legislators ;  to  wit,  what  conduct,  what  interests 
shall  we  restrict  and  hamper  by  placing  thereon  the  burden  of  paying  the 
large  amount  of  money  "  necessary  "  to  defray  the  expenses  of  Govern- 
ment ?     Some  one  must  pay  it.     Whom  shall  it  be  ? 

A  careful  exploration  of  its  ultimate  results  is  a  requisite,  preliminary 
of  all  wise  taxation.  Whether  the  tax  is  proposed  on  imported  goods, 
in  form  of  what  is  called  a  tariff,  or  by  any  other  mode  of  taxation  is 
immaterial.  The  essential  thing  is  that  the  effect  of  such  taxation  should 
be  both  to  afford  a  revenue  and  at  the  same  time  place  taxation  on  con- 
duct and  interests  which  ptiblic  policy  requires  should  be  discouraged 
ajid  burdened. 

Hence  a  tariff  laid  on  a  commodity,  simply  because  it  is  imported  and 
comes  in  competition  with  the  domestic  product,  is  not  based  on  sound 
principles.  For  example,  we  now  have  a  tariff  on  imported  lumber. 
The  effect  of  such  tariff  is  to  discourage  the  importation  of  lumber  and 
to  increase  the  destruction  of  our  own  forests,  a  procedure  fruitful  of  evil. 

We  shall  start  on  the  right  method  toward  a  proper  system  of  taxa- 
tion, when  it  is  fully  recognized  that  all  taxes,  of  every  kind  and  nature, 
should  be  levied  for  the  purpose  of  discouraging  acts  apparently  benefi- 
cial to  the  individual  who  commits  them,  but,  in  abroad  sense,  detrimen- 
tal to  the  public  welfare. 


HOW  TAXES  SHOULD  BE  LAID. 


415 


cases,  in  order  to  make  it  still  further  unpleasant  to  commit 
crimes,  a  pecuniary  penalty  called  a  "  fine  "  is  attached  to 
them,  in  addition  to  a  term  of  imprisonment.  To  the  com- 
mission of  many  petty  crimes  and  misdemeanors  a  fine  alone 
is  practically  attached  ;  that  is,  on  payment  of  the  fine, 
further  penalties  are  waived. 

In  essence,  a  "  fine  "  is  a  tax  levied  on  persons  proven 
guilty  of  certain  acts,  for  the  purpose  of  discouraging  them 
from  repeating  the  offense.  Thus  the  principle  of  govern- 
ing by  taxation, — of  attempting  to  prevent  certain  conduct 
by  levying  a  tax  on  all  who  commit  it, — is  established  by 
long  usage. 

WHAT  A   TARIFF   IS. 

This  principle  has  been  fully  adopted,  not  only  as  a  means 
of  preventing  criminal  acts,  but  also  for  the  prevention  of 
certain  things  deemed  adverse  to  the  public  interests.  Thus 
from  the  beginning  of  the  United  States  Government  to  the 
present  time  we  have  always  levied  a  greater  or  less  tax  on 
many  of  the  goods  imported  into  this  country  from  foreign 
nations.  This  tax  is  called  a  tariff.  Its  object  has  been,  for 
most  of  the  tim.e,  twofold.  First.  Raising  a  revenue  for 
support  of  the  Government.  Second.  Preventing  foreigners 
from  combining  their  superior  capital  with  labor  degraded 
by  centuries  of  oppression,  and  thus  taking  an  unfair  advan- 
tage of  the  workmen  of  this  country. 

The  tariff,  then,  is  essentially  a  mode  of  taxation  imposed 
for  raising  revenue  ;  for  preventing  the  industries  of  this 
country  being  injured  by  competition  with  those  of  nations 
whose  civilization  is  inferior  to  ours  ;  and  for  encourag-insr 
the  development  of  a  greater  variety  of  manufactures  in 
this  country. 

TAXATION   SHOULD   ALWAYS   BE   LAID   WITH   A   TWOFOLD 

PURPOSE. 

What  we  now  need  is  an  extension  of  the  principle  of 
government  by  taxation.  The  entire  revenue  needed  for 
the  support   of  National,  State,  and  Municipal  Government 


4i6 


SOCIAL  STRUGGLES. 


should  be  raised  by  taxes  laid  on  conduct,  the  repression  of 
which  experience  has  shown  best  for  the  public  welfare. 
The  virtues  of  mankind  should  not  be  taxed.  The  burden 
of  taxation  should  be  laid  on  crime,  idleness,  celibacy,  vain 
luxuries,  avarice,  and  kindred  vices  and  follies  of  our  race. 
For  example,  a  tax  of  ten  dollars  yearly  laid  on  every  dog 
would  persuade  many  persons  not  to  keep  dogs.  Taxation, 
in  form  of  licenses,  should  be  used  to  keep  the  number  of 
middlemen  down  to  the  minimum  required  to  transact  the 
business  of  the  country  at  the  lowest  possible  charges.  Every 
superfluous  middleman  and  every  unnecessary  railroad  is  a 
waste  of  the  productive  energies  of  the  nation.  The  silent 
but  powerful  influence  of  taxation  should  be  brought  to  bear 
as  preventives  of  all  misdirection  of  industry,*  As  the 
frogs  once  swarmed  over  Egypt,  so  doctors  and  lawyers  now 
abound  in  this  country,  A  high  license  fee  for  practicing 
law  or  medicine  would  have  a  salutary  effect. 

If  taxation  were  laid  for  the  purpose  of  repressing,  limit- 
ing and  discouraging  certain  things  whose  suppression  or 
limitation  is  best  for  the  public  good,  a  correlative  result 
would  follow.  Conduct  which  long  trial  has  shown  best  for 
the  interests  of  society  would  be  encouraged  by  freeing  it 
more  or  less  completely  from  taxation.  For  example,  it  is 
greatly  to  the  interest  of  society  that  every  man  should  have 
a  home  of  his  own.  In  order  to  encourage  the  sobriety,  in- 
dustry and  economy  requisite  to  obtain  one,  the  Government 
should  so  collect  its  revenues  that  homesteads  would  be  en- 
tirely free  from  taxation. 

*  The  following  item  of  news  clipped  May  i,  1886,  shows  the  effect  of 
taxation  on  business :  "  The  number  of  brewers  in  England  is  decreasing 
rapidly.  In  1870  there  were  32,000  brewers  in  the  United  Kingdom. 
During  the  next  decade,  or  up  to  1880,  the  number  lessened  at  a  rate  of  a 
thousand  a  year,  there  being  in  1880  only  22,000.  Then  in  one  year  appears 
the  surprising  decrease  of  7000,  there  being  in  1881  only  15,000.  Since 
then  they  have  declined  less  rapidly,  but  are  nevertheless  losing  ground 
none  the  less  surely.  They  number  now  but  1 3,000  in  contrast  to  the 
32,000  of  sixteen  years  ago.  The  temperance  movement  has  not  made 
this  change,  but  the  levying  of  a  duty  upon  beer  instead  of  upon  malt, 
which  has  concentrated  the  business  in  a  less  number  of  hands." 


SELF-ADJUSTING  TAXES.  417 

ADVANTAGES   OF   INDIRECT   TAXATION. 

Every  foot  knows  best  where  the  shoe  pinches.  Every 
one  knows  his  ability  to  pay  taxes  better  than  it  is  possible 
for  a  Government  to  know.  Indirect  taxes  give  a  man  con- 
sidferable  latitude  in  determining  how  much  taxation  he  will 
bear.  When  taxes  are  laid  on  things  with  w^hich  he  can  dis- 
pense, he  can  more  easily  adjust  his  taxes  to  his  income 
than  when  they  are  laid  on  his  home,  and  on  other  things 
which  he  must  have.  For  these,  and  kindred  reasons,  a  large 
revenue  can  be  drawn  from  a  nation  by  indirect  taxes  with 
less  oppression  to  industry  than  if  it  were  paid  in  form  of 
direct  taxation.  Furthermore,  the  burden  of  taxation  on 
a  community  in  reality  is  greatly  lightened  when  conduct 
hurtful  to  society  is  partially  repressed  by  such  taxation. 
For  example,  a  tax  of  fifty  thousand  dollars  laid  on  the  liquor 
dealers  in  a  city  is  no  burden  whatever  to  that  city,  if  fifty 
thousand  dollars'  worth  of  additional  wealth  be  created  as  a 
result  of  greater  sobriety,  produced  by  lessening  the  number 
of  rum  shops  by  a  high  license. 

CORPORATIONS. 

Fourth.  The  steadily  growing  numbers  and  wealth  of 
artificial  persons,  called  corporations,  constitute  a  condition 
never  before  known  in  the  world's  history.  Private  individ- 
uals are  constantly  dying.  In  many  cases  their  estates  are 
so  divided  as  to  lose  the  power  they  exerted  when  used  as  a 
single  mass  by  one  person.  But  beings  created  by  legisla- 
tion are  comparatively  immortal.  The  component  members 
of  the  corporation  are  constantly  growing  old  and  dying ; 
but  nev/  mem.bers  steadily  fill  their  places.  Meantime,  the 
"  being  without  a  soul  "  often  grows,  and  grows  in  wealth 
and  power  untilits  surplus  revenue  is  alone  sufficient  to  sway 
the  legislation  of  a  State  by  political  chicanery.  Such  a  cor- 
poration is  an  organization  of  such  vast  power  that  there  are 
practically  only  two  things  capable  of  keeping  it  from  using 
its  strength  for  its  own  aggrandizement,  regardless  of  the 
public  welfare. 
27 


4i8 


SOCIAL  STRUGGLES. 


First.  Its  own  self-interest.  This  often  does  keep  a  cor- 
poration from  unjust  and  oppressive  conduct  toward  the  in- 
dividuals with  which  it  comes  in  contact.  But  all  history 
and  experience  tell  us  that  liberty,  justice  and  fair  dealing 
hang  on  a  slender  thread,  and  are  in  peril  whenever  power  is 
restrained  only  by  what  its  possessor  may  deem  expedient 
and  best  for  himself. 

Second.  Legislative  control.  This  is  most  effectively 
secured  by  measures  which  necessitate  the  widest  possible 
publicity  of  the  corporation's  affairs  and  the  fewest  opportu- 
nities for  bribery  of  public  agents  and  officers.  It  is  gener- 
ally believed  that  our  large  corporations  constantly  use  cor- 
rupt means  to  influence  legislation.  This  belief  is  undoubt- 
edly based  on  humiliating  facts.  Numerous  instances  are 
constantly  occurring  in  which  the  wealth  of  corporations  is 
used  to  corrupt  elections.  We  therefore  need  stringent  laws 
to  prevent  money  being  directly  or  indirectly  used  to  buy 
votes.  The  State  should  furnish  tickets  to  voters  so  that  the 
pretext  of  raising  money  for  printing  tickets  would  no  longer 
exist.  We  are  rapidly  drifting  into  a  condition  in  which  it 
will  be  utterly  impossible  for  any  one  to  obtain  nomination 
.for  important  office  unless  he  be  both  able  and  willing  to 
furnish  a  large  sum  for  illegitimate  use  during  the  campaign. 
Candidates  should  be  prevented  from  using  a  single  dollar 
in  any  way  whatsoever  to  promote  their  own  election. 

ONE  OF  THE  MAIN  ROOTS  OF  THE  LABOR  QUESTION. 

WJiat  a  long  period  of  suffering  and  privation  has  intervened 
between  the  present  and  the  time  zvhen  man  first  stood  on  earth 
with  no  tools  but  his  naked  hands.  And  how  much  easier  the 
lives  of  your  ancestors  might  have  been  if  tJiey  Jiad  possessed  the 
iinplements  we  noiv  have. 

To  those  who  were  actors  in  that  drama,  it  seems  but  as 
yesterday  since  this  country  emerged  from  a  civil  war  terribly 
destructive  of  life  and  property.  The  initial  point  of  this 
awful  struggle  arose  from  discussion  of  a  question  which  irre- 
sistibly thrust  itself  upon  public  attention  :  "  Has  one  man 


OWNERSHIP  OF  LABOR. 


419 


a  right  to  own  another  man  ?  "  In  other  words  :  Has  capi- 
tal a  right  to  own  labor  ? 

One  phase  of  this  contest  was  settled  by  the  war.  One  form 
of  slavery  was  abolished.  One  method,  which  capital  em- 
ployed to  own  labor,  has  been  made  impossible.  But  other 
means  and  devices  employed  by  capitalists  to  own  laborers 
are  still  under  legal  protection,  and  in  the  majority  of  in- 
stances are  sanctioned  and  defended  by  the  same  persons 
who  bitterly  denounced  the  form  of  labor  ownership  extin- 
guished by  the  logic  of  human  butchery.  Since  the  war,  the 
majority  of  persons  imagine  that  capital  cannot  own  labor. 
But  a  little  examination  shows,  that  the  emancipation 
measures  only  partially  destroyed  the  control  of  the  capital- 
ist over  the  laborer. 

For  example,  let  us  suppose  an  industrial  arena  of  some 
kind  ;  no  matter  whether  it  be  a  factory,  a  forge,  a  mine,  a 
plantation,  or  a  ship-yard,  wherein  one  thousand  laborers 
are  employed.  Comparatively  few,  and  those  inexpensive, 
tools  are  required.  Each  workman  furnishes  his  own  tools 
and  is  paid  a  certain  amount  of  wages  per  day.  Under  such 
conditions,  the  laborer  is  comparatively  independent.  If  any 
disagreement  arise  between  the  employer  and  himself,  he 
can  pack  up  his  tools  in  a  few  minutes  and,  with  his  tools 
on  his  back,  seek  employment  elsewhere. 

OWNERSHIP    OF   WHATEVER    PERFORMS   LABOR    IS   OWNER- 
SHIP  OF   LABOR. 

Let  US  reverse  the  aforesaid  conditions  and  see  what  the 
result  will  be.  Suppose  some  inventor  should  create  an 
automaton  of  steel,  wood  and  leather  which  will  perform 
exactly  one  man's  labor  in  a  day's  time.  The  cost  of  this 
automaton  to  be  $500.  Under  such  a  condition  of  facts, 
is  it  not  clear  that  if  the  capitalist  should  buy  one  thousand 
of  these  bloodless  laborers  he  would  own  his  labor  ?  He 
could  turn  the  men  made  of  flesh  and  blood  adrift.  He 
could  carry  on  his  works  by  the  labor  of  his  own  chattels 
just  as  truly  as  if  those  chattels  consisted  of  one  thousand 


420 


SOCIAL  STRUGGLES. 


Africans,  just  landed  from  a  slave  ship,  for  which  he  had 
paid  $500  a  piece. 

Let  us  now  perfectly  retain  the  principle  involved  in  the 
last  aforesaid  example  and  state  another  condition  of  affairs. 
Suppose  the  aforesaid  capitalist,  instead  of  buying  a  thou- 
sand automatons,  should  buy  a  steam-engine  and  some 
machinery,  which  would  enable  one  hundred  laborers  to  per- 
form as  much  labor  in  a  day  as  a  thousand  laborers  could 
with  the  old-fashioned  tools  owned  by  themselves.  The 
machinery  is  so  expensive  that  the  laborers  are  too  poor  to 
buy  it.  Even  if  they  combined,  and  saved  money  enough 
to  start  a  rival  industry,  they  could  not  make  and  use  ma- 
chinery similar  to  that  owned  by  the  capitalist.  He  has  his 
machinery  protected  by  a  law  called  "  a  patent,"  and  as 
this  law  is  backed  by  the  entire  judicial  and  military  power 
of  the  nation,  he  has  the  exclusive  right,  for  a  long  term 
of  years,  to  use  the  machinery  covered  by  that  patent.  It 
is. utterly  in  vain  for  the  nine  hundred  workmen  to  think  of 
competition  with  machinery  by  using  their  own  tools. 
Now,  in  this  case,  is  it  not  just  as  clearly  true  that 
the  capitalist  owns  the  labor  of  nine  hundred  men,  as  it  is 
in  the  aforesaid  hypothetical  case  in  which  he  owned  the 
labor  of  a  thousand  bloodless  workmen  ? 

A   FISH-HOOK   MACHINE. 

In  this  city,  at  the  present  time,  several  automatic  labor- 
ers are  at  work  making  fish-hooks.  The  wire  is  automatic- 
ally fed  into  one  end  of  a  machine,  and,  without  the  touch 
or  guidance  of  a  single  human  finger,  it  emerges  from  the 
other  end  of  the  machine  a  perfectly  finished  fish-hook. 
The  hooks  are  made  by  one  of  these  machines  many  times 
faster  than  they  could  be  made  by  a  machine  of  flesh  and 
blood.  A  pail  is  hung  on  a  spout  at  the  end  of  the  machine 
where  the  hooks  emerge,  and  into  this  the  completed  hooks 
rapidly  fall.  Whoever  will  take  the  pains  to  examine  the 
construction  of  a  fish-hook  cannot  fail  to  see  that  the  afore- 
said machine  is  a  great  stride  toward  the  creation  of  autom- 
atons which  will  accurately  and    uncomplainingly  perform 


WHEN  LABOR  IS  OWNED.  .21 

the  labor  of  living  machines.  It  will  also  clearly  appear  to 
him,  that  the  capitalist  who  owns  one  of  these  expensive 
machines,  protected  from  competition  by  a  patent,  and  by 
successive  patents  on  improvements  in  that  machine,  virtu- 
ally owns  several  fish-hook  makers.  He  owns  the  fish-hook 
makers,  because  he  owns  and  has  absolute  control  over  the 
tools  without  which  those  fish-hook  makers  cannot  earn  five 
cents  a  day. 

Hundreds  of  illustrations  similar  to  the  fish-hook  machine 
could  be  cited.  But  that  is  sufficient  to  exemplify  the  prin- 
ciple involved  in  all  such  cases,  viz.  :  Whoever  owns  the 
tools,  zvithout  wJiicJi  a  workman  cannot  earn  a  living,  owns 
the  labor  of  that  workman,  and,  to  that  extent,  owns  the  work- 
man himself.  Whenever  this  occurs,  capital  virtually  owns 
labor. 

A   MAN   SHOULD    CONTROL   HIS    MEANS  OF   SUBSISTENCE. 

In  one  sense,  a  laborer  without  tools  has  perfect  free-' 
dom.  But,  if  deprivation  of  tools  imply  deprivation  of  the 
means  of  supplying  himself  with  the  necessaries  of  life, 
whoever  controls  his  tools  controls  the  workman's  very  ex- 
istence. Just  to  the  extent  the  capitalist  can  control  the  la- 
borer's food,  the  capitalist  has  control  of  the  laborer's  lib- 
erty and  person.  It  is  possible  that  the  workman's  liberty 
may  thus  be  restricted  to  that  amount  of  which  it  has  al- 
ways been  impossible  to  deprive  a  slave  ; — viz.,  the  liberty 
of  dying. 

What  occurs  in  the  aforesaid  example,  in  case  a  disagree- 
ment arise  between  the  owner  of  the  nine  hundred  metal- 
lic workmen  and  the  one  hundred  living  workmen  ?  Sup- 
pose the  one  hundred,  thinking  they  are  not  receiving  a 
just  proportion  of  the  wealth  created  jointly  by  themselves 
and  the  nine  hundred  automatic  workmen,  should  strike 
for  higher  wages  ?  Their  demands  are  not  acceded  to  and 
the  entire  thousand  laborers  are  thrown  out  of  employment. 
What  then  happens?  It  is  certain  that  the  owner  of  the 
nine  hundred  workmen,  or  what  is  essentially  the  same 
thing,  the  machines  which   perform  a   labor   equivalent  to 


.22  SOCIAL  STRUGGLES. 

the  labor  of  nine  hundred  men,  is  at  comparatively  little 
expense  for  the  maintenance  of  his  chattels.  While  they 
are  idle,  he  loses  the  interest  on  their  value  and  is  at  the 
expense  of  protecting  them  from  rust  and  other  injury. 
Derangement  of  his  business  also  causes  him,  to  a  consider- 
able extent,  loss  of  the  value  of  his  own  services  in  manag- 
ing it.  But  the  hundred  living  workmen  are  subjected  to 
nearly  the  same  daily  expenses  when  idle  as  when  at  work. 
The  idle  machines,  the  automatic  laborers  do  not  eat.  But 
the  idle  workmen  must  eat  or  die. 

In  such  an  event,  is  it  not  apparent  that  the  power  of  the 
one  man  who  owns  nine  hundred  laborers  is  far  greater  to 
coerce  the  hundred,  than  the  power  of  the  hundred  is  to  co- 
erce the  owner  of  the  nine  hundred  workmen  ? 

One  of  the  chief  characteristics  of  the  last  century  is  the 
enormous  progress  therein  made  in  mechanical  art  and 
skill.  The  principles  discovered  by  scientific  men  in  the 
laboratory  and  study  have  been  converted  to  practical  use 
in  the  workshop  by  the  inventor  and  artisan.  The  vast 
majority  of  the  tools  used  by  labor,  wherewith  to  create 
wealth,  one  hundred  years  ago,  have  been  made  worthless 
by  the  invention  of  better  ones,  and  the  few  in  existence 
are  found  only  as  curiosities  in  museums  and  similar 
places. 

Every  year  a  large  addition  is  made  to  the  great  number 
of  labor-saving  machines  already  in  use.  In  all  probability, 
the  future  will  witness  as  great  an  increase  in  the  invention 
of  machinery  as  has  occurred  in  the  past.  Many  minds  are 
constantly  at  work  devising  plans  for  introducing  machin- 
ery into  departments  of  industry  where  manual  labor  still 
holds  sway.  It  is  likely  these  persons  will,  to  a  greater  or 
less  extent,  succeed  in  their  purpose. 

N-EED   OF   A   LARGE   AMOUNT   OF   CAPITAL. 

When  the  whole  field  of  invention  and  mechanical  skill  is 
surveyed  at  a  glance,  another  startling  fact  appears,  viz. : 
the  steadily  growing  expensiveness  of  machinery.  It  is 
steadily  growing   more    effective  and  performs   more    and 


OWNERSHIP  OF  TOOLS. 


423 


more  of  the  Avork  formerly  done  by  human  hands.  This 
necessitates  and  implies  machines  more  ponderous,  more 
complicated,  more  accurately  constructed,  and  more  costly 
than  those  of  inferior  power  of  execution  and  less  adapta- 
tion to  the  peculiar  purpose  required.  Every  year  more 
and  more  capital  is  required  to  equip  a  mechanic  with  tools 
which  will  enable  him  to  successfully  compete  with  others 
engaged  in  producing  the  same  forms  of  wealth  that  he  is. 

The  inevitable  result  of  the  foregoing  facts  is  that  the  tools 
of  labor  are  steadily  passing  into  the  ownership  of  capital- 
ists and  beyond  the  control  of  the  artisans,  the  successful 
prosecution  of  whose  calling  depends  on  the  use  of  those 
tools.  Some  one  must  be  the  owner  of  these  tools,  and 
such  ownership  makes  a  capitalist.  In  an  indirect,  but 
nevertheless  very  effective  manner,  capital  yearly  owns  more 
and  more  labor.  It  is  constantly  growing  more  difficult  for 
a  mechanic,  beginning  life  with  nothing  but  his  bare  hands, 
to  obtain  the  independence  which  naturally  flows  from  the 
combined  ownership  of  tools  and  possession  of  the  requisite 
skill  to  use  them  in  creating  some  form  of  wealth.  What 
chance  has  a  poor  mechanic,  of  average  business  ability,  to 
ever  become  the  owner  of  a  tool  so  expensive  that  the  an- 
nual interest  on  its  cost  is  greater  than  his  entire  wages  for  a 
year?  Such  a  person  has  not  a  fair  chance  in  the  ever  pres- 
ent industrial  struggle,  compared  with  the  inheritors  of 
wealth,  the  born  owners  of  the  mechanics'  tools  in  use  at 
present.  If  he  undertake  to  own  his  own  tools,  he  has  the 
terrible  disadvantage  of  working  in  competition  Avith  men 
already  the  owners  of  many  workmen  with  iron  bones  and 
steel  fingers.  What  wonder  is  it  that  he  should  either 
despair  or  be  filled  with  hatred  of  a  social  system  under 
which  such  inequalities  of  position  are  possible  ? 

This  then  is  one  of  the  problems  which,  whether  we  de- 
sire to  or  not,  we  must  face  and  solve.  Cowardly  evasion 
will  not  avail.  Wisdom  and  humanity  unite  in  bidding 
us  candidly  recognize  the  facts,  and,  by  interchange  of 
thoughts,  arrive  at  just  conclusions. 


^24  SOCIAL  STRUGGLES. 


INVENTIONS    SHOULD     NOT   BE    MADE    MEANS    OF     OPPRES- 
SION. 

What  remedies  shall  we  employ  to  cure  the  aforesaid  evil 
before  it  develops  into  a  more  alarming  condition? 

Obviously,  it  is  neither  the  destruction  of  labor-saving 
machines  nor  the  repression  of  invention.  Every  automaton 
which  performs  human  labor  should  be  recognized  as  a  means 
of  relieving  mankind  from  drudgery.  If  it  do  not,  it  is  not 
the  machine  which  is  to  blame.  It  is  the  conditions  under 
which  it  is  employed  that  are  at  fault.  Every  inventor  who 
facilitates  the  creation  of  wealth  should  be  crowned  as  a 
general  in  the  field  of  industry  whose  victories  over  matter 
have  been  won  by  patient  thought  and  labor.  If  his  crea- 
tions, after  being  set  at  work,  leave  behind  them  a  trail  of 
oppression,  distress,  and  bitterness,  it  is  not  his  fault.  They 
should  bring  additional  wealth,  comfort,  and  happiness  to 
every  member  of  the  human  family.  When  they  fail  to  do 
so,  the  social  system  under  which  they  are  employed  must 
be  defective  in  some  way. 

The  annual  production  of  wealth  in  this  country  is  esti- 
mated at  about  twenty  per  cent,  of  the  total  wealth  of  the 
country.  A  considerable  portion  of  this  wealth  is  the  pro- 
duct of  automatons,— of  various  kinds  of  machinery.  It  fol- 
lows that,  to  the  extent  that  a  class  controls  such  machinery 
and  receives  the  profits  therefrom,  just  to  that  extent  such 
a  class  controls  and  absorbs  the  annual  production  of  wealth. 
But  this  is  not  the  fault  either  of  the  machines  or  of  the  in- 
ventors who  devised  them.  The  defect  is  in  the  manner  in 
which  the  ownership  of  those  machines  and  the  profit  aris- 
ing- from  their  use  are  distributed. 

HOW   INVENTIONS   ARE   MADE. 

All  scientific  discoveries  and  all  devices  whereby  a 
discovery  is  practically  applied  to  the  improvement  of  the 
condition  of  mankind  are  not  due  solely  to  the  labors  of 
the  immediate  discoverer  and  inventor.  They  are  the 
culmination  of  the  thoughts  and  labors  of  generations.     As 


INJUSTICE  SOMEWHERE.  425 

such,  in  the  widest  sense,  they  are  the  heritage  of  the  whole 
human  family.  What  would  be  thought  of  a  man  who 
should  propound  the  idea  that  the  discovery  of  ansesthetics 
should  inure  only  to  the  benefit  of  those  worth  over  ten 
thousand  dollars  ;  and,  that  all  worth  less  than  that  sum 
should  bear  severe  surgical  operations  without  relief  from 
suffering?  Would  he  not  be  denounced  either  as  an  idiot, 
or  as  a  monster  of  cruelty. 

ALL    SHOULD    BE    BENEFITED    BY   DISCOVERIES   AND 
INVENTIONS. 

It  is  self-evident  that  progress  in  science  and  art  ought 
not,  in  any  respect  whatsoever,  place  a  child  born  in  pov- 
erty in  a  position  of  greater  disadvantage  than  it  would  have 
been  if  such  progress  had  not  been  made.  A.  little  reflec- 
tion makes  it  also  evident  that  such  a  child  should  not 
simply  have  its  condition  ameliorated  by  such  progress. 
The  same  relative  advantage  should  accrue  to  it  as  accrues 
to  the  children  of  the  rich.  In  many  important  respects, 
the  child  of  a  poor  mechanic,  born  in  1885,  has  greater 
advantages  in  carrying  on  the  struggle  of  life  than  were 
possessed  by  such  a  child  born  in  1685  or  1785.  But  this 
undoubted  fact  does  not  satisfy  the  desires  of  the  laboring 
classes.  It  ought  not  to  satisfy  them,  because  simple 
justice  requires  that  every  forward  step  in  human  knowl- 
edge and  progress  should  impartially  benefit  the  whole 
people.  Unless  the  poor  child  in  1885  has  the  same  rela- 
tive advantages  over  the  poor  child  born  in  1785  that  the 
rich  child  in  1885  has  over  the  rich  child  born  in  1785,  there 
is  an  injustice  somewhere  ;  there  is  a  defect  in  the  distribu- 
tion of  the  benefits  of  means  whereby  mankind  can  supply 
their  necessities  and  march  onward  toward  a  higher  plane  of 
development. 

GROWTH     OF     INEQUALITY. 

While  the  condition  of  the  laboring  classes  to-day  is  far 
better  than  it  was  in  1785,  the  ineqiiality  between  different 
classes  is  o-reater  now  than   then.     There  is  a  greater  dis- 


426  SOCIAL   STRUGGLES. 

parity  of  income,  of  wealth,  and  of  social  position.  The  root 
of  this  matter  largely  lies  in  the  fact  that  the  means  of 
creating  wealth,  the  tools  without  which  labor  is  compara- 
tively helpless,  have,  to  a  large  extent,  silently  passed  into 
the  ownership  and  control  of  the  capitalists,  and  especially 
of  those  who  own  a  large  amount  of  capital. 

WHAT   SHOULD    BE   DONE. 

When  a  person  is  in  difficulty  or  danger  by  reason  of 
a  change  in  his  condition  the  obvious  remedy  is  to  restore 
him  to  the  circumstances  he  was  in  prior  to  his  distress. 
Thus  when  a  man  is  in  danger  of  drowning,  the  first  thing 
to  do  is  to  pull  him  out  of  the  water. 

The  artisans  have  been  placed  at  a  disadvantage  by 
taking  away  the  ownership  of  their  tools.  The  obvious 
remedy  is  to  restore  these  men,  as  far  as  practicable,  to 
their  former  position  of  tool-owners.  Measures  must  be 
adopted  which  will  enable  a  mechanic  to  directly  or  indi- 
rectly become  a  joint  owner  of  the  expensive  tools  required 
in  modern  industry.  This  can  be  done  either  by  enabling 
him  to  buy  a  share  in  ownership  of  the  machines  with  which 
he  works  ;  or  by  making  his  compensation  consist,  in  part, 
of  the  profit  derived  from  combining  his  personal  labor  with 
the  automatic  labor  of  the  machine.  Such  methods,  how- 
ever, are  practicable  only  when  the  workmen  have  a  consid- 
erable degree  of  character  and  intelligence.  The  province 
of  this  work  is  not  to  discuss  the  details  of  such  measures. 
Its  only  object  is  to  indicate  the  principles  involved  and  to 
show  the  justice  of  such  procedures.  When  that  point  is 
conceded,  the  mode  of  their  execution  will  soon  be  arranged. 
When  we  adopt  a  mode  of  recompensing  inventors  radi- 
cally different  from  that  now  in  vogue,  and  abolish  our 
present  patent  laws,  we  shall  have  taken  a  great  step  toward 
making  the  artisan,  at  least,  a  part  owner  of  the  tool  with 
which  he  creates  wealth. 

In  opposition  to  such  a  plan,  the  first  thing  which  will  be 
urged  is  the  well  known  fact  that  an  attempt  to  aid  a  lazy, 
dissolute,  intemperate  mechanic  to  become  the  owner   of 


JUSTICE  INJURES  NO  ONE.  427 

capital  is  as  futile  as  to  hold  up  a  coarse  sieve  and  try  to  fill 
it  with  fine  sand.  We  concede  that  no  one  can  be  helped 
who  will  not  try  to  help  himself.  But  if  the  follies  and 
misdeeds  of  a  few  artisans  constitute  good  reason  for  depriv- 
ing all  artisans  of  a  fair  and  equitable  opportunity  to  im- 
prove their  condition,  does  it  not  inevitably  follow  that  the 
follies  and  wrongful  acts  of  a  few  capitalists  form  a  valid 
reason  for  depriving  all  capitalists  of  their  just  rights  ?  Such 
an  argument  could  be  applied  to  many  different  facts  and 
conditions  and  would  always  lead  to  a  conclusion  as  pre- 
posterous as  the  one  aforesaid.  No  sound  argument  can 
be  framed  in  support  of  any  policy  or  system  which  is  not 
based  on  the  self-evident  fact  that  every  man  is  equal  to 
every  other  man,  so  far  as  his  natural  equitable  rights  are 
concerned  ;  and,  furthermore,  that  the  rights  of  one  citizen 
should  be  as  fully  protected  as  those  of  another. 

The  question  may  be  asked :  Would  not  the  above  sug- 
gested measures  injure  capitalists?  No.  In  the  proper 
sense  of  the  word,  no  one  is  "  injured  "  by  taking  away 
from  him  some  unfair  advantage  which  he  is  using  to  the 
detriment  of  ot*hers.  The  aforesaid  suggested  measures 
would  doubtless  powerfully  tend  to  diminish  the  present 
disparity  of  wealth.  They  would  tend  to  prevent  some 
persons  from  growing  as  rich  as  they  would  if  allowed  to 
retain  wrongful  advantages  and  absorb  the  wealth  created 
by,  and  justly  belonging  to  others.  They  would  also  lessen 
the  number  of  idle  young  men  and  women,  the  children  of 
rich  parents,  who  consume  wealth  to  the  creation  of  which 
they  have  never  given  an  hour's  labor. 

Such  things  are  not  necessarily  "  injuries."  They  may 
become  the  greatest  blessings.  A  person  who  cannot  grow 
rich  without  some  unjust  advantage  being  first  given  him 
ought  to  live  without  riches.  Riches  properly  belong  only 
to  those  who,  on  a  footing  of  equality,  exert  superior  ef- 
forts and  ability  in  creating  and  saving  wealth  without  prej- 
udice to  any  person  whatsoever. 


CHAPTER  XIX. 

Socialism. — Horror  of  Socialism. — What  Socialism  is.' — A  Socialistic 
Pqst-office. — Socialistic  Schools. — Socialistic  Libraries  and  Parks.-— 
Socialistic  Water  and  Fire-engines. — Socialistic  Money. — Socialism 
at  West  Point.— Socialistic  Enterprises. — Advantages  of  Socialism. 
— Should  Socialism  be  Extended  ? — Socialism  does  not  Favor  Lazi- 
ness and  Unthrift. — How  to  Help  the  Poor. — Ungrateful  Snobs. — 
Future  Probabilities. — Causes  of  Discontent.— Why  Some  are 
Richer  than  Others. — What  shall  We  do.? — Lessons  of  Expe- 
rience.— ■"  With  what  Measure  ye  Mete,  it  shall  be  Measured  to 
you  again." — Need  of  Hastening  Slowly. — Need  of  Changing  our 
Patent  Laws. — Defects  in  our  Social  System. — Folly  of  Violence. — 
The  true  Course. 

//  is  never  safe  to  allow  one  class  to  enact  laws  in  regard  to 
their  ozvn  interests. 

Napoleon  is  reported  to  have  said:  "The  world  is  gov- 
erned by  epithets."  Certain  it  is,  that  in  all  periods  of  his- 
tory, words  have  been  used  as  the  equivalent,  or  synonym, 
of  elaborate  and  presumably  conclusive  arguments.  Thus, 
for  a  considerable  time  in  the  history  of  this  country,  the 
term  "Abolitionism"  was  employed  to  define  particular 
ideas,  so  revolting  to  the  majority  that  a  mention  of  their 
name  rendered  useless  any  further  statement  or  examina- 
tion in  regard  to  them.  For  a  long  period,  the  term 
"  Christian  "  applied  to  a  person  was  all  that  was  necessary 
to  brand  him  as  an  enemy  of  the  human  race,  to  whose 
words  none  but  a  knave  or  a  fool  should  listen.  A  thou- 
sand years  were  not  sufificient  to  destroy  the  argument  once 
conveyed  by  the  word  "  Jew."  Once  having  established 
the  fact  that  a  person  was  a  Jew,  no  further  consideration 
of  his  merits  was  deemed  necessary.  That  name  barred  all 
argument  and  overpowered  all  facts.  For  many  centuries, 
the  term  "  heretic  "  was  all  the  description  needed  of  a 
person  to  show  that  his  ideas  and  character  were  so  utterly 
bad  that  society  should  treat  him  as  an  outlaw  and  regard 

428 


GROUNDLESS  FEARS. 


429 


it  a  crime  to  listen  to  his  speech  or  read  his  writings.  Mul- 
titudes have  been  put  to  death  for  reading  the  works  of 
authors  to  whom  the  epithet  "  heretic  "  had  been  applied. 
Hundreds  of  cases  similar  to  the  foregoing  could  be  cited, 
all  showing  that  a  word,  an  epithet,  has  swayed  the  policy 
of  nations,  time  and  again. 

Slowly  and  painfully,  the  world  has  outgrown  a  fear  of 
many  terms  which  once  sent  a  thrill  of  horror  through  what 
was  then  the  most  respectable  and  intelligent  portion  of 
society.  But  human  nature  is  unchanged.  The  difference 
between  generations  and  ages  is  simply  in  the  kind  of 
words  and  epithets  used,  instead  of  arguments,  to  prove 
that  certain  ideas  or  modes  of  conduct  are  reprehensible. 
At  first,  epithets  overpower  all  argument ,  but  finally  they 
lose  their  spell, — the  real  argument  is  listened  to,  and  theji 
the  senseless  nature  of  the  epithets  appears.  But  a  new  oc- 
casion at  once  arises;  a  new  epithet  is  coined,  which  goes 
through  the  same  stages  as  its  predecessors. 

HORROR   OF  SOCIALISM. 

Recently,  the  term  "Socialism  "  has  been  used  to  sum 
up  and  define  certain  ideas  and  principles  so  utterly  absurd 
and  wrong,  in  the  estimation  of  the  majority,  that  an  ex- 
amination of  them  is  thought  useless.  It  is  presumed  that 
nothing  is  requisite  to  condemn  any' proposition,  but  to  es- 
tablish the  fact  that  it  is  "  Socialistic." 

Very  learned  essays  and  books  have  been  written  to 
show  that  socialism  is  utterly  impracticable  and  visionary. 
But  these  wise  men  ignore  the  simple  fact  that,  to  a  consid- 
erable extent,  socialism  is  in  actual  and  successful  operation 
in  this  country,  and  is  so  intrenched  in  the  good  opinion  of 
the  masses  of  our  population  that  nothing  can  dislodge 
it.  The  "  impracticable  notion  "  has  arrived  and  has  evi- 
dently come  to  stay. 

WHAT   SOCIALISM   IS. 

The  essence  of  socialism  is  the  ownership,  management, 
and  use  of  property,  by  numbers  of  persons   in  common, 


.^o  •  SOCIAL  STRUGGLES. 

enforced  by  law.  Socialistic  property  is  bought  with  means 
contributed  in  common  ;  it  is  managed  by  agents  whose 
wages  are  paid  in  common  ;  and  its  use  and  objects  are  for 
the  common  welfare  without  reference  to  the  amount  con- 
tributed for  its  purchase  and  support  by  each  individual. 
Those  who  contribute  a  large  amount  toward  the  purchase 
or  support  of  socialistic  property  have  no  greater  share  in 
the  benefits  of  its  ownership  than  those  who  contribute 
very  little,  or  nothing.  It  is  state,  colonial,  or  municipal 
ownership  and  control  of  property  and  business. 

A   SOCIALISTIC   POST-OFFICE. 

Our  postal  system  is  pure  socialism.  A  vast  amount  of 
real  estate  has  been  bought  with  taxes  paid  in  common. 
Buildings,  many  of  them  very  costly,  have  been  constructed 
with  money  paid  in  common.  The  carriers  of  the  mails  are 
paid  from  the  common  purse,  and  the  same  is  true  of  all 
the  agents  employed  to  receive  and  deliver  the  mails. 

To  partially  support  this  enterprise,  a  tax  is  laid  on  the 
people  in  accordance  with  the  principles  on  which  the  pos- 
tal property  is  bought  and  managed  in  other  respects.  The 
man  who  mails  a  thousand  letters  at  once  does  not  get  them 
carried  at  wholesale  price.  Unlike  ordinary  commercial 
transactions,  there  is  no  such  thing  as  charging  a  person 
more  because  he  buys  at  retail.  The  price  for  one  letter  is 
one-thousandth  part  the  price  for  carrying  one  thousand 
letters. 

Whether  a  letter  is  carried  two  miles  or  two  thousand 
miles  makes  no  difference  in  the  tax  laid  upon  the  sender. 
Neither  does  it  make  any  difference  whether  the  place  to 
which  a  letter  is  to  be  carried  is  easily  and  cheaply  reached 
by  steamboat  or  railroad ;  or  whether  it  can  only  be 
reached  by  a  long  and  expensive  journey  by  stage  or  horse- 
back. 

In  conducting  the  postal  system,  an  army  of  agents  and 
many  millions  of  capital  are  employed.  In  fact,  the  recep- 
tion, carriage,  and  delivery  of  the  mails  for  fifty  millions  of 
people  is  a  business  of  enormous  magnitude.     Considering 


SUCCESS  OF  COMMON  SCHOOLS.  43 1 

the  immense  territory  over  which  this  business  extends ; 
the  difficulties  of  its  accurate  transaction  ;  the  great  num- 
ber of  requisite  employees ;  and  the  large  amounts  of 
money  transmitted,  the  postal  system  can  challenge  a 
comparison  of  its  management  with  that  of  any  private 
enterprise. 

It  is  not  simply  in  this  country  that  this  socialistic  enter- 
prise is  in  successful  operation.  The  civilized  globe  is  now 
encircled  with  a  chain  of  post-offices.  And  the  experience 
of  the  whole  world  has  recorded  so  much  in  favor  of  a  post- 
office  owned  by  the  whole  people,  managed  by  the  peo- 
ple's servants,  and  supported  by  taxes  laid  on  a  socialistic 
principle,  that  there  is  not  the  slightest  probability  of  its 
ever  being  abandoned.  Instead  of  that,  the  tendency  is 
steadily  toward  widening  the  duties  of  the  post-office.  In 
England,  postal  savings-banks  have  been  in  successful  oper- 
ation for  a  considerable  time.  In  this  country,  the  cost  of 
sending  matter  has  been  so  much  reduced  that,  for  many 
purposes,  the  mails  are  now  used  instead  of  express  compa- 
nies. And  it  is  quite  probable  that  the  functions  of  our 
postal  department  could  be  further  increased  with  advan- 
tage by  reducing  the  cost  of  sending  packages  under  five 
pounds  in  weight,  and  by  the  establishment  of  a  system  of 
postal  savings-banks. 

SOCIALISTIC    SCHOOLS. 

Our  common-school  system  is  another  example  of  pure 
socialism.  School  buildings,  books  and  apparatus,  to  the 
extent  of  many  millions  of  dollars,  are  owned  in  common. 
The  wages  of  the  teachers,  the  fuel,  and  all  otherattendant 
expenses  of  these  schools  are  defrayed  by  laying  a  socialis- 
tic tax.  The  number  of  children  a  tax-payer  sends  to 
school  makes  no  difference  whatever  with  the  amount  of 
tax  levied  on  him  to  support  the  common  school. 

Some  persons  have  justly  found  fault  that  comparatively 
useless  studies,  such  as  Latin  and  Greek,  are  taught  in  our 
public  schools.  But,  most  such  persons  have  advanced 
that  such  teaching  was  "socialistic."     This  is  no  reason  at 


432  SOCIAL  STRUGGLES. 

all.  If  valid,  the  entire  common-school  system  would  be 
abolished  as  well  as  the  study  of  Latin  and  Greek.  Such 
studies  are  merely  an  abuse  of  our  thoroughly  socialistic 
common  schools.  Substantially,  their  defects  are  similar  to 
those  of  the  majority  of  private  schools.  They  attempt  to 
teach  too  many  things ;  neglect  instruction  in  the  cardinal 
doctrines  of  honor  and  morality  and  burden  the  pupils' 
memory,  instead  of  making  plain  the  few  simple  principles 
upon  which  rest  self-direction  and  independent  thought. 

SOCIALISTIC   LIBRARIES   AND   PARKS 

Public  libraries  are  an  example  of  socialism.  The  build- 
ings and  books  are  paid  for  and  owned  in  common.  A 
man  worth  only  ten  dollars  has  the  same  right  in  a  free 
public  library  as  a  man  has  who  is  Avorth  ten  million  dollars. 
Whether  a  person  use  the  library  himself  or  not  makes  no 
difference  in  the  tax  assessed  upon  him  for  its  support. 

Public  parks  are  also  forms  of  socialism.  Such  parks  are 
owned,  supported,  managed  and  enjoyed  by  the  public  in 
common.  He  who  never  visits  one  of  these  parks  is  not 
thereby  exempt  from  taxation  for  their  support.  The  ex- 
perience of  cities  which  have  established  public  libraries 
and  parks  is  in  favor  of  their  continuance  and  extension. 

SOCIALISTIC   WATER  AND   FIRE-ENGINES. 

The  introduction  of  water  in  a  city,  by  a  city,  is  a  purely 
socialistic  enterprise.  In  such  case,  the  expense  of  water 
for  private  use  is  defrayed  by  a  tax  laid  in  proportion  to 
the  water  consumed.  But  the  great  expense  of  water  for 
extinguishing  fires  and  for  other  public  purposes  is  de- 
frayed by  taxes  laid  on  the  community  in  common.  The 
experience  of  cities  is  in  favor  of  this  form  of  socialism. 
As  examples  on  an  immense  scale,  we  may  look  at  New 
York,  Boston,  Chicago,  Philadelphia  and  other  large  cities 
that  have  expended  millions  from  the  common  purse  to 
supply  water  in  common.  What  would  induce  New 
York,  for  instance,  to  put  the  Croton  water  into  the  hands 
of  a  private  company  ? 


ISSUING  OF  MONEY.  433 

All  the  large  cities  have  supplemented  socialistic  water 
with  an  expensive  fire  department.  The  tax-payer  whose 
property  does  not  need  fire-engines  for  its  protection  pays 
the  same  tax  as  if  it  did.  The  engine-houses,  the  engines 
and  all  the  other  means  for  putting  out  fires  are  owned  in 
common,  and  the  wages  of  the  firemen  are  paid  from  the 
common  purse.  Thus  the  interests  of  the  fire  department 
are  made  completely  identical  with  the  interests  of  the 
people. 

SOCIALISTIC   MONEY. 

The  mints  are  another  illustration  of  pure  Socialism. 
The  mints  and  their  machinery  are  owned  in  common  and 
the  expenses  of  their  maintenance  are  defrayed  by  a  common 
tax.  Although  a  considerable  sum  of  public  money  is 
yearly  appropriated  for  the  support  of  the  mints  there  is  no 
probability  that  any  civilized  nation  on  the  globe  will  re- 
turn to  the  old  system  of  private  coinage.  Coinage  by  the 
State,  for  the  benefit  of  the  State,  has  been  found  better 
than  to  have  coinage  in  the  hands  of  those  whose  self-inter- 
est continually  tempt  them  to  act  contrary  to  the  common 
interest. 

The  greenbacks  are  socialistic.  They  are  printed  at  the 
common  expense  and  for  the  common  benefit.  The  only 
kind  of  money  now  in  circulation  in  the  United  States  that 
is  not  socialistic  is  the  national  bank-notes  and  they  are 
partially  so.  These  notes  are  printed  at  the  common  ex- 
pense, but  they  are  made  for  the  benefit  of  the  national 
bankers,  who  loan  them  at  interest  to  the  people.  In  all 
probability,  these  notes  will  soon  be  replaced  by  national 
paper  money,  and  then  our  entire  currency  will  be  composed 
of  money  made  and  used  by  the  people,  for  the  benefit  of 
the  people.  No  special  class  of  persons  will  then  have  spe- 
cial rights  to  issue  money  for  their  own  special  benefit. 

SOCIALISM   AT   WEST   POINT. 

West  Point   is  a  purely   socialistic    institution.     Young 
men  are   fed,  clothed,  lodged  and  educated  at  the  public 
28 


434 


SOCIAL  STRUGGLES. 


expense.  Furthermore,  as  soon  as  their  studies  are  com- 
pleted, they  are  furnished  permanent  employment  in  the 
public  service  and  paid  out  of  the  common  money.  When 
incapacitated  in  the  public  service,  by  any  cause,  from 
performing  further  duty  they  are  paid  a  pension  for  the  re- 
mainder of  their  lives.  Thus,  a  graduate  of  West  Point, 
who  faithfully  performs  his  duty,  is  an  adopted  child  of  the 
nation,  certain  of  a  maintenance  through  life.  What  re- 
cord have  the  offspring  of  this  socialistic  mother  made? 
There  is  but  one  voice  on  that  subject.  On  the  average,  no 
class  of  public  servants  have  rendered  greater  services  to 
the  nation  ;  and  none  have  shown  greater  fidelity  and  hon- 
esty when  placed  in  positions  where  public  interests  and 
public  money  were  in  their  keeping.  If  such  good  results 
flow  from  a  socialistic  school  devoted  to  giving  special  in- 
struction in  the  arts  of  war,  why  may  not  similar  benefits 
flow  from  a  kindred  school  devoted  to  giving  special  in- 
struction in  the  arts  of  peace? 

If  a  high  sense  of  honor  can  be  instilled  into  the  pupils  of 
one  public  school,  why  cannot  other  public  schools  be  made 
teachers  of  personal  honor  ? 

SOCIALISTIC   ENTERPRISES. 

The  attention  of  the  whole  civilized  world  has  recently 
been  directed  to  that  wonderful  achievement  of  science,  the 
tremendous  explosion  which  shattered  acres  of  rock  in  Hell 
Gate  Channel.  But  many  persons  do  not  reflect  that  it  was 
a  socialistic  enterprise.  It  was  directed  by  pupils  of  West 
Point  ;  paid  for  out  of  the  common  purse ;  and  performed 
for  the  common  benefit,  without  the  slightest  reference  to 
any  other  consideration. 

Whoever  visits  New  York  or  Brooklyn  may  see,  hanging 
high  in  the  air,  a  bridge  connecting  those  cities  which  is 
one  of  the  most  daring  and  marvelous  triumphs  of  engineer- 
ing skill  this  world  has  ever  seen.  And  yet  this  wonder- 
ful structure  is  the  product  of  what  self-styled  "scientists" 
have  told  us  was  "  utterly  impracticable,"  municipal  social- 
ism.    The  Brooklyn  Bridge  has  been    built  with  common 


HOW  SOCIALISM  BENEFITS. 


435 


money  for  the  common  benefit.  Its  benefits  are  compara- 
tively untried.  But  enough  is  known  to  render  it  certain 
that,  if  by  magic  the  bridge  could  be  obliterated  and  its  cost 
refunded  to  the  people  of  the  great  cities  whose  common 
money  built  it,  an  overwhelming  majority  would  refuse 
such  a  proposition. 

Those  past  middle  life  can  remember  when  nearly  all  the 
important  bridges  in  this  country  were  private  property,  for 
the  use  of  which  toll  was  charged.  At  the  same  time,  our 
principal  roads  were  managed  by  private  companies  who 
levied  toll  on  travelers.  Roads  and  bridges  are  now  nearly 
all  owned  and  kept  in  repair  by  the  public  and  are  free  to 
the  use  of  all.  A  community  which  has  once  abolished  the 
inconvenience  of  toll-gates  is  not  likely  to  permit  their  re- 
establishment. 

ADVANTAGES   OF   SOCIALISM. 

Many  other  examples  of  the  actual  and  triumphant  oper- 
ation of  socialism  could  readily  be  cited.  The  advantages 
of  a  successful  public  co-operation  are  enormous.  They 
arise  largely  from  the  fact  that  when  the  whole  people  con- 
duct a  business  the  persons  in  charge  of  that  business  are 
public  servants  whose  interests  lie  chiefly  in  serving  the 
people  to  the  best  of  their  ability.  For  example,  the  people 
of  the  city  of  New  York  own  the  Croton  water  and  hire 
those  in  charge  of  it.  Therefore,  these  agents  have  few  in- 
terests adverse  to  the  interests  of  the  people  of  New  York. 

But  if  a  private  company  owned  the  Croton,  the  domi- 
nant question  before  its  agents  would  be  :  How  large  prof- 
its can  we  make  from  the  sale  of  this  water  ?  The  larger 
the  profits  made  under  their  management,  the  greater  the 
probability  of  their  continuance  in  office,  at,  perhaps,  in- 
creased pay.  The  quality  of  the  water  and  its  abundant 
supply  would  be  subordinated  to  a  question  which  would 
arise  whenever  any  improvement  in  the  mode  of  obtaining 
or  supplying  the  water  was  suggested;  viz..  Will  it  pay.'' 
And  by  this  question  would  not  be  meant  :  Will  it  pay  the 


436 


SOCIAL  STRUGGLES. 


people  of  New  York?     It  would   mean:  Will  it  increase 
the  profits  of  this  water  company? 

What  is  true  of  a  water  company  is  true  of  a  public 
mint,  or  any  other  form  of  established  and  successful  public 
co-operation.  Such  a  mode  of  conducting  a  business  puts 
it  out  of  the  power  of  a  few  persons  to  conduct  that  partic- 
ular business,  solely  to  make  it  just  as  profitable  to  them- 
selves, and  just  as  great  a  burden  on  the  rest  of  society  as 
can  safely  be  done. 

Wealth  may  be,  and  often  is,  obtained  by  legal  means 
which  are  superficially  just  but  essentially  unjust.  Such 
means  of  getting  wealth  are  more  dangerous  to  the  com- 
munity than  robbery  by  open  violence,  simply  because  they 
are  so  insidious  as  not  to  be  immediately  recognized  and  re- 
sisted. Those  who  have  both  the  ability  and  the  disposition 
to  grow  rich  by  stealthily  preying  upon  the  fruits  of  others' 
labor,  are  largely  prevented  from  doing  so,  in  whatever  di- 
rection the  general  public  assume  control  of  a  particular 
business.  In  other  words,  opportunities  for  getting  more 
out  of  the  public  than  is  fairly  given  in  return  are  limited 
by  the  extent  to  which  business  is  carried  on  by  the  public 
themselves.  For  example,  if  the  mails  were  not  carried 
and  distributed  by  the  public,  what  a  field  for  extortion  and 
plunder  that  business  would  be  !  This  might  be  done  so  as 
to  appear  at  first  sight  equitable,  and  the  superficial  ques- 
tion continually  asked  in  regard  to  that,  as  it  now  is  with 
reference  to  existing  extortion :  "  If  the  price  be  too  high, 
why  do  you  buy  it  ?  " 

The  public  may,  and  sometimes  do,  suffer  losses  from  dis- 
honest officials.  But  such  losses  are  usually  trifling  com- 
pared with  the  enormous  robberies  inflicted  on  society  by 
the  greed  and  rapacity  of  private  owners  who  control  some- 
thing the  public  are  obliged  to  buy  of  them.  For  instance, 
the  public  loses  comparatively  nothing  by  dishonest  mint 
officials,  although  many  millions  of  gold  and  silver  yearly 
pass  through  their  hands.  On  the  side  of  private  owner- 
ship, look  at  the  vast  sums  continually  stolen  from  the 
public  by  dishonest  manipulation   of  railroads,    telegraphs, 


IS  OUR  KNOWLEDGE  PERFECT? 


437 


Stocks,  money  and  other  forms  of  wealth  under  private  con- 
trol !  Look  at  the  colossal  fortunes  drawn  from  the  people 
by  placing  extortionate  prices  on  patented  articles !  And 
look  at  the  great  and  sudden  wealth  obtained  by  artificially 
raising  and  lowering  the  prices  of  grain  and  other  prod- 
ucts ! 

SHOULD    SOCIALISM  BE  EXTENDED? 

The  aforesaid  facts,  and  kindred  ones  which  could  be 
readily  cited,  lead  us  to  ask  :  Have  we  reached  the  limits 
to  which  socialism  can  be  employed  with  benefit  to  society? 
That  there  is  a  point  at  which  public  co-operation  must 
give  way  to  individual  and  private  liberty  and  freedom  of 
action  is  undoubtedly  true.  The  question  is,  what,  and 
where  that  point  is  ?  How  much  further  can  the  affairs  of 
mankind  be  advantageously  conducted  by  a  system  of  co- 
operation so  extended  that  every  citizen  is  made  one  of  the 
partners  ? 

Those  small  persons  who  fancy  themselves  on  the  highest 
attainable  peak  of  wisdom  make  an  outcry  at  the  least  sug- 
gestion of  a  greater  extension  of  municipal  and  national  co- 
operation. But  as  such  wails,  and  the  doleful  prophecies 
which  always  accompany  them,  have  always  occurred  at 
every  step  of  human  advancement,  little  attention  should 
be  paid  them. 

However,  because  many  things  can  advantageously  be 
done  in  common,  it  by  no  means  necessarily  follows  that 
therefore  all  business  should  be  so  conducted.  It  is  clear 
that  nothing  should  be  done  the  tendency  of  which  would 
be  to  encourage  laziness  and  wastefulness,  neither  should 
anything  be  done  that  would  weaken  incentives  to  acquire 
an  individual  home  and  support  an  individual  family. 

SOCIALISM    DOES    NOT    FAVOR    LAZINESS    AND    UNTHRIFT. 

It  is  commonly  supposed  that  all  forms  of  socialism  foster 
the  vices  of  idleness  and  improvidence.  But  the  present 
generation,  living  under  the  influence  of  a  large  number  of 
socialistic  institutions,  are  more  industrious  and  provident 


438 


SOCIAL  STRUGGLES. 


than  their  forefathers  were  who  Hved  before  public  owner- 
ship and  management  of  property  were  dreamed  of  to  the 
extent  now  in  actual  existence  and  operation.  There  is  no 
evidence  that  the  postal  department,  public  schools,  public 
libraries,  and  public  parks  make  those  who  enjoy  their 
advantages  either  lazy  or  shiftless.  On  the  contrary,  those 
institutions,  and  kindred  ones,  are  potent  generators  of 
industry  and  thrift.  Their  demonstrated  tendency  is  to 
elevate  the  self-respect  of  the  masses ;  to  widen  the  horizon 
of  their  thoughts  and  ideas  ;  to  give  them  a  fuller  and  more 
comprehensive  knowledge  of  the  advantages  derived  from 
ownership  of  capital ;  and,  above  all,  to  inspire  them  with 
hope  that  there  is  a  possibility  of  their  condition  growing 
steadily  better,  if  they  will  only  make  a  little  more  effort  to 
help  themselves. 

HOW   TO    HELP   THE   POOR. 

The  history  of  all  attempts  to  improve  the  condition  of  a 
degraded  class  tells  one  story  with  painful  monotony.  No 
idleness  and  improvidence  are  so  difficult  to  remedy  as  that 
of  persons  in  poverty  and  misery,  hopeless  of  ever  being 
able  to  reach  a  condition  of  greater  comfort  and  independ- 
ence. Despair  is  the  most  dangerous  of  all  social  diseases. 
Whatever  makes  it  a  little  easier  for  such  persons  to  escape 
from  the  bondage  of  abject  poverty  and  humiliating  social 
inequality,  and  whatever  throws  light  upon  a  path  leading 
from  the  morass  in  which  they  are  mired  to  higher  and 
pleasanter  grounds,  has  a  powerful  tendency  to  make  them 
more  industrious  and  frugal.  Little  can  be  done  to  amelio- 
rate the  condition  of  a  community,  or  an  individual,  by 
direct  alms.  But  means  which  show  the  easy  possibilities 
of  self-help  are  permanently  fruitful  of  good  results. 

UNGRATEFUL  SNOBS. 

We  frequently  witness  events  which  make  us  ashamed 
of  our  kind.  We  see  persons  who  in  childhood  occupied 
a  position  verging  on  pauperism.  By  the  kindly  help  of 
socialistic  institutions  they  have  emerged  from  want  and  a 


FURTHER  STEPS  TO  BE  TAKEN. 


439 


precarious  existence  to  a  state  of  comparative  affluence  and 
wealth.  They  now  snarl  at  the  hand  that  lifted  them  out  of 
the  mud,  and  clothed  and  fed  them.  They  denounce  the 
Sermon  on  the  Mount  as  an  ancient  humbug  and  proclaim 
the  gospel  that  every  man  should  solely  take  care  of  him- 
self.   This  shallow  selfishness  is  styled  "  Economic  Science." 

FUTURE   PROBABILITIES. 

Our  ancestors,  five  hundred  years  ago,  imagined  their 
social  organization  perfect.  We  are  prone  to  imitate  them 
and  to  fancy  further  progress  impossible.  But  history 
forces  us  to  concede  that  the  tendency  of  our  race,  the 
world  over,  for  the  past  century,  has  steadily  been  toward 
the  principle  of  socialism.  Where  we  shall  ultimately  land 
no  one  can  tell.  The  certain  thing  is,  that  many  kinds  of 
business  are  now  conducted  with  great  advantage  by  the 
whole  people  which,  one  hundred,  and,  in  many  cases,  fifty 
years  ago,  it  was  supposed  could  only  be  fitly  carried  on  by 
private  enterprise.  Reasoning  from  the  past,  it  seems  prob- 
able that  the  results  of  human  selfishness  can  be  mitigated, 
and  a  remedy  found  for  many  social  evils,  by  placing  still 
more  kinds  of  business  under  public  ownership  and  control. 

CAUSES   OF   DISCONTENT. 

It  is  commonly  imagined,  that  multitudes  are  discon- 
tented simply  and  solely  because  some  men  have  more 
wealth  than  others.  But  in  fact  such  is  not  generally  the 
case.  Very  few  persons  are  so  utterly  foolish  and  unreason- 
able as  to  deny  that  a  man  is  entitled  to  the  fruit  of  his  own 
labors.  By  reason  either  of  inherited  ability,  better  oppor- 
tunities, or  superior  diligence  in  self-improvement,  one  man 
may  possess  more  than  average  skillfulness  in  carrying  on 
some  particular  industry.  If  he  diligently  employ  his  attain- 
ments and  strength  in  thus  creating  wealth,  it  is  perfectly 
clear  that  the  amount  of  wealth  so  created  belongs  to  him 
just  as  rightfully  as  it  would  if,  by  reason  of  less  skill  and 
less  industry,  said  amount  were  smaller.  It  is  also  evident, 
that   if   one   man,    by   practicing   superior    economy,   save 


440 


SOCIAL  STRUGGLES. 


and  accumulate  more  of  the  product  of  his  labor  than 
another,  he  is  the  owner  of  the  amount  so  saved,  just  as 
rightfully  as  if,  by  less  carefulness,  or  less  self-denial,  its 
amount  were  smaller.  The  portion  of  the  community 
which  will  deny  the  foregoing  propositions  is  insignificant 
in  numbers  and  influence,  and  always  must  be. 

The  Creator  gave  us  equality  of  rights  but  did  not  give 
us  equality  eit4ier  of  physical  or  mental  strength.  As  man's 
powers,  to  a  considerable  extent,  are  devoted  to  the  creation 
of  wealth  it  necessarily  follows  that  inequality  of  power  to 
create  wealth,  must  naturally  result  in  an  inequality  in  the 
amount  of  wealth  created  by  different  individuals.  Further- 
more, as  men's  judgments  of  the  relative  importance  of 
things  differ  ;  and  as  some  men  are  willing  to  undergo  more 
self-denial  for  the  purpose  of  saving  wealth  than  others  ;  it 
necessarily  follows  that,  by  virtue  of  superior  self-denial  and 
economy,  some  men  will  naturally  have,  and  justly  possess, 
more  wealth  than  others.  But,  after  conceding  the  fore- 
going self-evident  truths,  the  root  of  the  matter  we  are  con- 
sidering remains  untouched  :  viz.,  Except  to  a  very-  limited 
extent,  the  great  and  increasing  inequality  of  wealth,  is  not 
due  to  the  superior  skill,  industry  and  economy  in  creating  and 
saving  wealth,  of  one  vtait  over  another. 

WHY   SOME   ARE    RICHER   THAN   OTHERS. 

Great  inequality  of  wealth  chiefly  arises  from  the  ability 
of  one  man  being  so  dextrously  and  cunningly  employed  in 
manipulating  and  managing  commercial  and  legal  machinery 
as  to  result  in  his  absorbing  a  considerable  portion  of  the 
wealth  created  by  a  large  number  of  other  men.  A  small 
portion  of  wealth  thus  taken  from  each  one  of  a  large  num- 
ber of  persons  amounts  to  a  great  sum  when  collected  in 
one  man's  hands. 

Great  wealth  is  usually  not  acquired  by  great  skill  and 
labor  in  its  creation,  because  life  is  too  short  and  man's  pow- 
ers are  too  limited  to  render  such  a  thing  ordinarily  possi- 
ble. Skill  in  obtaining  legal  possession  of  wealth  created 
by  the  labor  of  others  is  the  secret  of  most  large  fortunes. 


THE  EVIL  TO  BE  ABATED. 


441 


There  are  exceptions  to  the  foregoing  rule,  but  they  are 
rare.  Whoever  doubts  it  is  invited  to  trace  the  history  of 
the  large  estates  within  his  knowledge.  Donations  to  hos 
pitals,  schools  and  kindred  objects  are  frequently  merely  at- 
tempts to  divert  public  attention  from  the  fact  that  consid- 
erable property  has  been  gathered  in  one  mass  by  indefen- 
sible methods.  Vanity  thus  incites  the  donor  to  give  prop- 
erty, which  justly  belongs  to  others,  in  a  public  manner. 

The  evil  we  are  called  on  to  diminish  is  one  man  so  using 
his  abilities,  his  position,  and  his  capital,  as  not  to  violate 
law  and  to  appear  fair  :  but,  nevertheless  to  take  advantage 
of  others  and  thus  acquire  more  wealth  than  in  equity  be- 
longs to  him.'^ 

*  As  an  indication  of  growth  toward  a  public  recognition  of  hitherto 
largely  unsuspected  evils,  the  following  letter,  written  by  a  distinguished 
clergyman  to  the  New  York  Sun,  January  4,  1886,  is  republished  : 

To  THE  Editor  of  The  Sun — Sir  .•  You  quoted  lately  a  passage 
from  an  article  of  mine  on  overvvealth,  and  invited  me  to  explain  my 
views.     They  are  simply  these  ; 

1.  Dangers  to  the  peace  and  prosperity  of  the  country  must  be  guarded 
against  by  the  Government  and  laws. 

2.  Men  and  corporations,  so  large  pecuniarily  as  to  be  able  to  buy  up 
Legislatures,  are  a  danger  to  the  peace  and  prosperity  of  the  country. 

3.  The  acquisition  and  holding  of  such  wealth  should  be  carefully 
hedged  about  by  wise  legislation. 

There  is  my  syllogism.     Now  let  me  add  a  few  notes  : 

1.  A  large  part  of  the  enormous  wealth  of  individuals  and  corporations 
is  made  by  lying,  stealing,  and  oppression.  The  running  up  and  down 
of  stocks,  what  is  known  as  "  bulling  and  bearing,"  is  practical  lying, 
and  has  nothing  to  do  with  real  values.  Stock  watering  is  nothing  but 
stealing.  Credit  Mobilier  schemes,  by  which  directors  rob  stockholders 
to  enrich  themselves,  are  common  methods  of  oppressing  the  poor,  who 
have  been  fooled  into  putting  their  Httle  all  into  stock. 

2.  The  rich  man  is  protected  by  law,  and  what  with  preferred  creditors 
and  property  held  in  his  wife's  name  and  a  hundred  other  devices,  he  fails 
and  is  as  rich  as  ever.  The  poor  man  is  thrown  out  of  employment,  and 
has  nothing  to  fall  back  on.  He  can  be  turned  out  at  a  moment's  notice, 
and  has  no  redress. 

3.  We  need  legislation  that  will  defend  the  poor,  e.  g.,  making  a  month's 
notice  necessary  before  discharging  a  hand,  paying  him  by  the  year  as  a 
salaried  man,  and  giving  him  a  proportional  interest  in  the  concern. 


442 


SOCIAL  STRUGGLES. 


WHAT   SHALL   WE   DO? 


If  we  would,  we  cannot  evade  the  questions  which  this 
perverted  use  of  the  mechanism  of  our  social  organization 
forces  upon  us.  When  every  man  has  a  vote,  unless  the 
great  majority  are  satisfied,  they  will  certainly  make  changes 
of  some  kind  in  the  national  policy.  With  the  present  grow- 
ing discontent,  it  is  not  simply  a  question  of  standing  still 
or  not.  The  problem  is  narrowed  down  to  this  :  In  what 
direction  shall  we  move  ?  Shall  we  make  our  social  system 
still  more  democratic  by  adopting  measures  whose  tendency 
will  be  to  create  a  more  equal  distribution  of  wealth  ?  Or 
shall  we  make  our  social  system  more  aristocratic  and  more 
plutocratic  by  adopting  measures  whose  tendency  will  be 

4.  We  need  legislation  that  will  make  the  man,  as  he  grows  richer,  to 
bear  more  of  the  public  burdens.  The  graduated  income  tax  would  be 
the  most  equitable.  If  that  be  impracticable,  as  many  hold,  then  let  the 
nearest  practicable  plan  be  adopted,  so  that  with  us,  as  in  ancient  Athens, 
the  rich  shall  bear  the  chief  burdens  of  the  State. 

5.  We  need  legislation  to  restrict  the  power  of  corporations,  forbidding 
and  preventing  gifts,  direct  or  indirect,  all  watering,  all  use  of  franchises 
without  full  payment  of  value  to  the  State,  all  interest  of  directors  in  side 
schemes  of  a  parasitic  nature,  all  secrecy  of  operation,  all  combination 
with  other  corporations,  and  all  exorbitant  dividends  at  the  cost  of  the 
public. 

6.  With  such  legislation  there  need  be  no  hmitation  of  property.  Jus- 
tice, equal  to  all,  will  give  trade  and  acquisition  a  natural  health,  which  is 
now  denied  by  a  partial  legislation  in  favor  of  the  rich  and  of  great  cor- 
porations. With  such  legislation  property  will  be  naturally  limited,  and 
there  will  be  no  place  for  discontent  or  socialism. 

7.  If  we  saw  a  man  a  mile  high  stalking  over  this  way  from  the  West, 
and  discovered  that  he  had  already  trampled  eight  or  ten  towns  into 
nothingness,  we  should  feel  called  upon  to  take  measures  to  suppress  him 
before  he  could  put  his  big  foot  on  the  Sun  Building  and  blot  out  its 
light  forever.  He  would  be  a  danger  which  we  should  be  justified  in  pre- 
paring against.  Our  great  corporations  are  very  much  like  this  giant. 
They  crush  thousands  where  they  tread.  They  hire  journals,  courts,  and 
Legislatures,  and  have  everything  their  own  way.  It  is  for  the  people  of 
our  land  so  to  curb  this  power  that  it  may  be  only  useful  and  not  harm- 
ful.   If  this  be  socialism,  I  am  a  Socialist. 

Howard  Crosby, 


WHAT  HISTORY  TELLS  US. 


443 


to  widen  the  distinction  between  classes,  to  Increase  the 
number  living  in  luxurious  idleness,  and  to' place  the  wealth 
and  power  of  the  country  in  fewer  and  fewer  hands? 

By  gross  deception  the  people,  in  recent  years,  have  been 
misled  into  sanctioning  measures  whose  tendency  is  pluto- 
cratic. This  has  been  effected  partially  by  raising  the  cry  : 
"  Socialism  !  Socialism  !  "  and  pretending  that  socialism  was 
the  essence  of  evil.  But  all  experience  tells  us  not  to  be 
alarmed  by  cries  raised  by  those  who  think  progress  consists 
in  sitting  still ;  and  by  others  fearful  that  their  unjust  priv- 
ileges will  be  taken  from  them.  Suggestions  for  further 
practical  application  of  the  principle  of  public  co-operation 
are  legitimate,  and  worthy  of  the  most  earnest  and  careful 
consideration.  Should  such  an  inquiry  reveal  that  a  profita- 
ble extension  of  socialism  could  be  made,  if  honest  public 
agents  were  more  easily  obtained,  let  us  improve  our  com- 
mon schools  by  teaching  therein  a  keener  sense  of  personal 
honor. 

Theorists  have  advanced  doctrines  adverse  to  such  benefi- 
cent common  works  as  the  improvement  of  Hell  Gate,  pub- 
lic schools,  public  money,  and  kindred  things.  But  these 
persons  are  insignificant  in  numbers  and  everything  else 
except  in  the  assurance  with  which  they  make,  pretense  of 
superior  wisdom. 

LESSONS   OF   EXPERIENCE. 

In  England,  where  government  by  the  few  has  had  the 
fullest  and  fairest  trial,  such  government  is  pronounced 
against  by  a  steadily  increasing  minority  composed  of  the 
foremost  thinkers  of  that  nation.  The  bulwark  for  centu- 
ries of  aristocratic  ideas  bids  fair,  by  the  magic  of  discussion 
and  thought,  to  soon  be  converted  into  a  democracy.  Those 
who  admire  the  medieval  barbarism  which  now  lingers  in 
England  will  then  be  forced  to  transfer  their  affections  to 
Russia,  or  some  other  despotism. 

Not  only  England,  but  the  whole  world  is  demonstrating 
the  failure  of  all  forms  of  government,  animated  by  the  prin- 
ciple that  a  few — the  privileged,  the  rich,  the  cunning,  and 


444 


SOCIAL  STRUGGLES. 


the  strong — should  rightfully  be  permitted  to  prey  upon  the 
many,  the  simple,  the  poor,  and  the  weak. 

"WITH     WHAT     MEASURE     YE    METE,   IT   SHALL   BE   MEAS- 
URED  TO   YOU   AGAIN." 

Despotisms  are  trying  to  build  dams  wherewith  to  stay, 
among  the  masses,  the  slowly  but  steadily  rising  tide  of 
broader  thought  and  wiser  appreciation  of  their  own  rights. 
But  the  higher  the  dams  are  raised  the  higher  the  water 
will  surely  rise  behind  them.  When  the  inevitable  break 
comes,  these  builders  will  be  lucky  if  the  shattered  ruins 
be  not  stained  with  blood.  There  is  only  one  question 
concerning  retribution  being  visited  on  privileged  classes 
which  oppress  a  nation,  viz.:  How  long  will  it  be  delayed  } 

Let  us  then  go  forward  without  fear  toward  a  fuller,  a 
more  humane,  and  therefore  a  wiser  democracy.  The  path 
which  leads  to  equal  justice  to  all  and  to  national  adoption 
of  the  principle  that  the  strong  should  help,  instead  of  tak- 
ing advantage  of  the  weak,  is  the  only  path  of  safety.  All 
others  are  lined  with  pitfalls.  Let  us  be  bold  in  search  of 
Truth.  Let  us  trust  the  conclusions  to  which  it  leads, 
and,  at  the  same  time,  be  cautious  in  devising  and  adopting 
measures  to  put  them  in  practical  operation  and  effect. 

NEED   OF   HASTENING   SLOWLY. 

"  In  a  multitude  of  counsellors  there  is  safety."  There 
is  little  danger  that  any  pernicious  measure  will  be  adopted 
which  is  first  fully  subjected  to  public  criticism.  But 
where  principles  are  framed  into  law,  without  such  public- 
ity, serious  mistakes  are  likely  to  be  committed. 

No  important  law  should  be  enacted  by  the  legislature 
or  congress  to  which  it  is  first  submitted.  All  such  laws 
should  be  first  carefully  sifted.  Those  deemed  worthy  of 
possible  enactment  should  be  published  as  "  Proposed 
Laws,"  and  their  final  passage  deferred  to  the  next  legisla- 
ture, enlightened  by  at  least  one  year's  public  consideration 
of  them. 

Two  important  results  would  flow  from  a  procedure  like 


ONE,   OF  MANY  STEPS.  445 

that  aforesaid.  First.  A  much  needed  check  would  be 
placed  on  hasty  and  ill  considered  legislation.  Progress 
would  be  more  rapid  because  less  time  would  be  lost  in 
retracing  false  steps.  Second.  The  practical  application 
and  workings  of  democracy  and  socialism  would  be  ex- 
tended. The  whole  people  would  have  a  greater  voice 
than  they  now  have  in  the  enactment  of  laws  and  in  shap- 
ing and  directing  the  course  and  policy  of  our  social  organ- 
ization. More  fully  than  at  present  every  man  would  be  a 
legislator. 

NEED   OF   CHANGING    OUR   PATENT   LAWS. 

Of  several  ways  which  could  readily  be  named  whereby 
the  principle  of  socialism  could  advantageously  be  given 
a  wider  practical  application,  let  us  briefly  examine  one, 
viz.:  the  public  ownership  of  all  inventions. 

Suppose  a  physician  or  a  surgeon  should  make  a  dis- 
covery of  great  importance  to  mankind  and  claim  the  right 
to  sell  said  discovery  to  a  capitalist,  who,  for  17  years, 
would  deprive  the  people  of  its  benefits  unless  extortionate 
prices  were  paid  for  them.  Such  a  medical  man  would  be 
justly  denounced  as  a  traitor  to  the  profession  whose  mis- 
sion is  to  allay  human  misery.  Yet  this  is  similar  to  what 
is  done  by  inventors  who  sell  important  patents. 

In  the  aggregate,  the  public  pay  an  enormous  tax  in 
form  of  high  prices  on  patented  articles.  In  the  vast  ma- 
jority of  instances  this  tax  is  not  paid  to  the  inventors  of 
those  articles  or  of  the  machines  which  create  them,  but  to 
the  capitalists  who  directly  or  indirectly  control  the  patents. 
Inventors  generally  lack  the  requisite  capital  to  manufacture 
and  distribute  what  is  covered  by  their  patents  ;  hence 
necessity  compels  a  bargain  with  some  one  who  has.  In 
a  majority  of  cases  the  proverb  is  then  exemplified,  that 
"  necessity  never  makes  a  good  bargain." 

As  competition  with  a  manufacturer  whose  wares  are  pro- 
tected by  the  patent  law  is  out  of  the  question,  the  whole 
community  are  constantly  paying  a  large,  and  often  a 
wrongful,    tribute  to  those   who  control    patents.     Capital 


446 


SOCIAL  STRUGGLES. 


thus  quietly  obtains  and  seizes  an  opportunity  to  levy  an 
unfair  tax  on  labor.  When  one  patent  expires,  an  improve- 
ment on  the  old  one,  or  some  entirely  new  patent,  is  secured  ; 
thereby  enabling  capital  to  silently  maintain  an  unnoticed 
and  powerful  advantage.* 

What  will  future  ages  think  of  a  matter  of  then  almost 
forgotten  history,  a  system  of  law  whereby  the  public  bene- 
fit of  inventions  is  postponed  for  half  a  generation  after 
their  practical  application  to  some  useful  purpose? 

Every  useful  invention  tends  to  remove  the  human  race 
one  step  further  from  their  primitive  poverty  and  its  ac- 
companying privation  and  toil.  It  is  therefore  sound  public 
policy  to  foster  invention.  But  we  must  remember  that 
each  individual  inventor  adds  only  one  stone  to  the  monu- 
ment of  human  knowledge  which  countless  numbers  of  his 
predecessors  have  reared.  Without  the  knowledge  which 
has  thus  become  common  property,  his  invention  would  not 
have  been  possible.     Therefore,  the  owners  of  this  common 

*  The  following  news  item,  from  the  St.  Lotas  Republican,  illustrates 
how  our  present  patent  law  postpones  the  full  benefit  of  inventions. 
Many  similar  facts  could  be  adduced. 

NO  CHEAP  TELEPHONES   BEFORE  THE  YEAR    I900. 

It  will  be  a  long  time  before  telephoning  becomes  cheap.  Bell's  first 
patent,  the  one  upon  which  all  the  others  are  founded,  is  dated  March  7, 
1876.  Patents  are  seventeen  years  in  duration,  and  this  first  patent  will 
thus  run  out  in  1893.  But  there  are  other  patents  of  more  recent  date 
upon  parts  essential  to  the  operation  of  the  instruments.  For  instance, 
the  Blake  transmitter  was  not  patented  until  1881,  and  it  is  so  broad  that 
it  may  be  said  to  cover  almost  any  transmitter  which  might  be  con- 
structed. This  will  practically  secure  the  monopoly  until  1898.  Then 
there  have  been  many  other  patents  of  date  up  to  a  very  recent  time, 
which,  while  not  absolutely  essential  to  telephoning,  would  defeat  com- 
petition even  if  every  patent  on  essential  parts  were  out  of  the  way. 
Thus  the  Bell  Company  controls  patents  upon  switchboards  and  other 
apparatus  used  in  making  connections  which  would  put  competition  by 
those  who  have  not  the  right  to'use  them  at  a  great  disadvantage.  The 
nineteenth  century  will  see  no  change  from  the  present  conditions,  and  it 
is  impossible  to  foresee  what  other  improvements  will  be  patented  which 
will  in  the  future  be  considered  necessities. 


WHA  T  SIMPLE  JUSTICE  DEMANDS.  447 

knowledge  have  a  paramount  right  to  every  new  invention. 
For  his  addition  to  the  common  stock  of  knowledge,  the 
inventor  should  be  treated  as  a  citizen  who  has  made  a 
notable  contribution  to  the  commonwealth.  He  should  be 
pensioned,  or,  in  some  other  way,  paid  from  the  common 
purse,  and  paid  very  liberally.  But  neither  he,  nor  his 
assigns,  should  be  allowed,  as  at  present,  to  make  a  step  of 
human  progress,  for  a  considerable  period  of  time,  an  instru- 
ment of  human  oppression. 

Public  ownership  of  inventions  would  not  in  the  least 
check  the  development-  of  scientific  and  mechanical  knowl- 
edge and  skill.  On  the  contrary,  it  would  stimulate  them, 
by  rendering  their  rewards  more  equitable  and  certain. 

But  it  would  have  a  powerful  tendency  to  check  the 
growth  of  huge  monopolies  which  virtually  force  the  public 
to  pay  them  extortionate  profits  on  their  goods,  while  the 
operatives  whose  labor  created  them  are  paid  low  wages. 
It  would  then  be  generally  seen,  that  much  of  what  is  now 
ascribed  to  our  tariff  is  really  due  to  the  evil  influence  of 
private  ownership  of  inventions  which  should  be  free  to 
every  man  who  wishes  thereby  to  render  his  labor  easier,  or 
more  productive. 

DEFECTS    IN   OUR    SCJtIAL    SYSTEM. 

What  course  should  be  pursued  by  those  who  believe  the 
evils  of  monopoly  and  concentration  of  wealth  in  few  hands 
could  be  diminished  by  enlarging  the  field  of  national  co- 
operation ? 

Wherever  wrong  exists  there  is  always  one  proper  way 
to  attack  it,  and  that  is  the  manner  by  which  it  can  most 
effectually  and  speedily  be  destroyed.  The  choice  of  means 
depends  entirely  on  circumstances.  Revolutionary  violence 
is  not  only  admissible,  but  commendable,  whenever  despot- 
ism has  shut  off  other  means  of  redress. 

But  in  a  nation  where  suffrage  is  universal  and  unobstruct- 
ed, no  reasonable  question  can  arise  relative  to  the  proper 
method  of  righting  a  public  wrong.  Where  every  man  is 
armed  with  a  ballot ;  where  the  mails  are  open  for  the  dis- 


443 


SOCIAL  STRUGGLES. 


semination  of  ideas ;  and  where  freedom  of  speech  and  as- 
sembly for  discussion  are  unfettered,  poHtical  agitation  is  by 
far  the  most  potent  means  of  abating  any  evils  which  may 
exist  in  the  social  organization.  Where  all  power  is  lodged 
in  the  hands  of  the  people  they  have  no  one  but  themselves 
to  blame  if  the  laws,  or  their  administration,  be  not  what 
they  desire, 

FOLLY   OF  VIOLENCE. 

Lately,  it  has  been  said  :  "  We  wish  changes  in  our  na- 
tional policy  but  cannot  get  them,  because  the  great  ma- 
jority oppose  us  and  could  beat  us  in  a  political  contest. 
Therefore,  armed  resistance  is  the  only  way  to  obtain  our 
wishes."  To  such  persons  it  may  be  said  :  If  you  are  in 
such  a  small  minority  that  a  political  contest  is  hopeless, 
would  not  a  struggle  with  arms  be  equally  hopeless  ? 

Many  who  desire  political  changes  overlook  the  readiness 
with  which  these  changes  can  be  obtained.  Legislators  and 
politicians  are  continually  watching  the  drift  of  public  sen- 
timent. Eacli  party  constantly  tries  to  act  in  accordance 
with  the  wishes  of  the  supposed  majority  of  voters.  Con- 
sequently, the  policy  of  each  party  is  based  on  the  judg- 
ment of  their  political  leaders  as  to  what  laws  the  people 
will  ratify  at  the  next  election.  As  these  leaders  have  sub- 
stantially equal  sources  of  information,  the  result  is  the  very 
nearly  equal  balancing  of  the  two  great  political  parties. 

The  result  of  the  aforesaid  facts  is  that  a  resolute  minor- 
ity of  one  voter  in  every  hundred  can  often  hold  the  bal- 
ance of  power.  And  in  the  great  majority  of  cases,  a 
minority  of  one  voter  out  of  every  twenty,  who  will  un- 
flinchingly adhere  to  their  principles,  are  absolutely  certain 
of  inducing  one  of  the  great  parties  to  adopt  their  ideas. 

THE    TRUE    COURSE. 

The  lesson  of  these  facts  is  obvious.  Whenever  a  few 
persons  imagine  themselves  possessed  of  ideas  which  would 
benefit  the  public  to  incorporate  into  law,  it  is  their  duty  to 
organize  themselves  into  a  political  party  for  the   express 


THE  BEST  WEAPON.  A*g 

purpose  of  disseminating  such  ideas.  If  those  sentiments 
will  not  bear  the  ordeal  of  public  scrutiny  and  debate, 
they  will  deservedly  soon  become  ridiculous  and  drop  out 
of  sight.  But  if  they  are  founded  in  justice,  means  for 
putting  them  in  practical  operation  will  soon  be  devised, 
and  their  triumph  will  only  be  a  question  of  time. 

Away,  then,  with  all  foolish  talk  about  violence,  blood- 
shed and  arson  being  necessary  to  redress  existing  wrongs. 
Such  criminal  folly  only  aggravates  present  evils  and  post- 
pones their  destruction.  Let  all  socialists  fully  state  their 
demands  and  the  arguments  therefor  before  that  socialistic 
tribunal,  gatherings  of  voters  during  political  campaigns. 
The  ballot  is  the  most  effective  weapon  which  can  be 
wielded  against  wrongful  methods  of  government.  There- 
fore, organizations  and  assemblages  for  the  purpose  of  polit- 
ical education    are    essential,   alike   to   the  preservation  of 

regulated  liberty  and  to  further  social  development. 
29 


CHAPTER  XX. 

How  shall  we  Create  a  Stable  Currency? — Stability  of  Value  possible 
only  when  Conditions  are  Stable. — Money  is  not  strictly  a  Measure 
of  Value. — Difference  between  Money  and  other  Standards. — Some 
Relative  Facts. — Effect  of  Paper  Money. — Effect  of  Hoarding  Gold. 
— Why  Prices  change. — Changes  in  the  Number  of  Standards. — 
Silver  and  Gold  are  governed  by  the  same  Natural  Law. — Duty  of 
Congress. — Importance  of  the  Dollar  having  a  Uniform  Value.— 
The  Central  Question. — Fruit  of  a  False  Premise. — Money  must  be 
Adapted  to  Public  Intelligence. — Financial  Measures  suggested  for 
Consideration  and  Amendment. — The  Proper  Inscription. — A  Per- 
fect Currency. — Successful  Use  of  Paper  Money  requires  Intelligence. 
— What  will  Ultimately  Occur. 

A  fliictuating  currency  is  the  perennial  fountain  from 
wliicJi  floivs  many  evils  and  wrongs  generally  ascribed  to 
other  causes. 

We  have  heretofore  found  that  the  natural  laws  which 
create  value  apply  universally,  perpetually,  and  impartially 
to  all  things  given  and  received  in  exchange.  We  have 
also  found  that  all  things  contain  certain  inherent,  intrinsic, 
qualities  peculiar  to  themselves  ;  but  that  value  is  not  a 
quality  but  the  RESULT  of  a  condition  in  which  a  thing 
possessing  the  intrinsic  qualities  fitted  to  supply  a  want  is 
so  placed  as  to  meet  and  fill  such  a  want. 

We  have  found  that  when  a  thing  possessing  the  intrin- 
sic qualities  fitted  to  supply  a  certain  want  is  placed  under 
conditions  which  enable  it  to  meet  such  a  want,  a  value  is 
always  created  ;  and  that  the  uniformity  and  stability  of 
such  value  depend  entirely  on  the  uniformity  and  stability 
of  the  conditions  which  created  it. 

We  have  also  found  that  the  value  of  a  dollar,  or  any 
other  monetary  unit,  depends  on  the  same  facts  which  give 
a  value  to  a  bushel  of  corn.  The  value  of  the  "  bushel  " 
depends  on  the  number  of  those  bushels  offered  for  sale 

450 


I 


STABLE  CONDITIONS,  STABLE  VALUE.  451 

relative  to  the  need  of,  and  therefore  the  demand  for  such 
bushels.  The  value  of  the  "  dollar  "  depends  on  the  num- 
ber of  those  dollars  ofTered  for  sale  relative  to  the  need  of, 
and  therefore  the  demand  for  such  dollars.  When  dollars 
are  put  in  circulation  it  is  always  effected  by  selling  them  ; 
i.  i\,  giving  them  in  exchange  for  some  other  thing.  Un- 
less they  are  so  sold,  they  do  not  enter  into  circulation  and 
therefore  do  not  affect  the  value  of  other  dollars  already  in 
circulation  any  more  than  "  bushels"  of  corn  permanently 
withheld  from  market  affect  the  market  price  of  corn.  The 
desire  to  have  the  United  States  Treasury  contain  an  im- 
mense hoard  of  gold  is  the  natural  child  of  a  wish  to  depress 
the  prices  of  commodities  and  the  wages  of  labor,  thereby 
raising  the  value  of  bonds  and  kindred  evidences  of  indebt- 
edness. 

STABILITY   OF  VALUE    POSSIBLE    ONLY   WHEN    CONDITIONS 

ARE   STABLE. 

The  aforesaid  considerations  force  us  to  conclude  that  if 
we  wish  a  "  dollar  "  to  have  a  uniform  and  stable  value,  we 
must  frame  conditions  under  which  the  miviber  of  those 
dollars  offered  for  sale,  i.  c,  put  in  daily  constant  circula- 
tion, will  have  a  uniform  relation  to  the  need  of  such  dol- 
lars to  carry  on  the  varied  exchanges  of  society.  The  num- 
ber of  dollars  in  circulation  must  not  be  subjected  to  either 
an  increase  or  a  diminution  relative  to  the  demand  for  such 
dollars.  Their  relative  iminbcr  should  always  be  the  same, 
no  matter  what  changes  occur  in  their  absolute  number. 

To  more  fully  show  that  uniformity  in  the  relative  num- 
bers of  dollars  is  absolutely  requisite  to  insure  and  produce 
uniformity  in  the  value  of  each  one  of  those  dollars,  let  us 
illustrate  this  topic  again  in  a  manner  different  from  that 
heretofore  employed. 

MONEY   IS   NOT   STRICTLY  A   MEASURE   OF   VALUE. 

In  order  to  understand  this  subject,  we  must  observe  the 
wide  difference  which  exists  between  what  is  commonly 
called  the  "  measure  of  value  "  and  other  kinds  of  measures. 


452 


SOCIAL  STRUGGLES. 


The  United  States  have  arbitrarily  adopted  a  piece  of 
metal,  of  a. certain  weight,  as  the  unit  to  be  used  in  determin- 
ing weights.  This  is  kept  in  the  Government  buildings 
and  is  known  as  the  standard  pound  weight  and  duplicates 
of  it  are  made  when  required.  The  weight  of  this  standard 
pound  is  not  in  the  slightest  extent  affected  by  the  number 
of  other  "  pound  "  standards  which  may  be  made  in  exact 
resemblance  to  it. 

This  country  has  always,  as  at  present,  had  several  coins 
called  "  measures  of  value."  But  for  convenience  and 
brevity  we  shall  select  one,  and  that  the  coin  which  is  com- 
monly supposed  to  have  the  most  invariable  value ;  viz., 
the  gold  dollar.  Our  law  makers  have  enacted  that  a  gold 
dollar  shall  contain  23  22-100  grains  of  pure  gold  and  shall 
be  the  unit  of  value.  Substantially,  every  one  -of  these 
dollars  is  precisely  like  every  other  one  of  these  so-called 
"  measures  of  value."  That  is,  they  are  composed  of  the 
same  materials,  have  the  same  weight  and  the  same  size 
and  shape.  An  agreement  to  pay  or  receive  at  a  future 
time,  no  matter  how  distant,  a  certain  number  of  gold  dol- 
lars of  the  present  standard  of  weight  and  fineness,  is  con- 
sequently an  agreement  to  pay  or  receive  a  certain  number 
of  things  each  one  of  which  possesses  certain  intrinsic  and 
invariable  qualities. 

From  the  aforesaid  undoubted  fact  has  been  assumed  an- 
other statement  which  has  no  truthful  foundation ;  to  wit, 
that  because  the  size,  weight  and  constituent  materials  of 
these  gold  dollars  are  substantially  "  invariable,"  that  there- 
fore their  value  is  also  invariable.*  If  this  were  true,  it 
would  then  inevitably  follow  that  dollars  made  of  lead,  so 
long  as  they  were  always  of  the  same  shape  and  weight, 
would  also  have  an  "  invariable  "  value.  It  is  true  that  the 
weight  and  size  of  these  lead  dollars  would  be  substantially 

*  Curiously  enough  many  of  those  who  assert  that  "  legislation  can 
have  no  effect  on  value  "  unhesitatingly  accept  the  absurd  notion  that 
because  the  State  stamps  a  piece  of  metal  "  one  dollar,"  therefore  the 
value  of  that  dollar  is  fixed  by  such  an  act,  without  any  reference  to  other 
facts  and  conditions. 


THE  ACTUAL  FACT.  453 

"  invariable " ;  but  the  value  of  a  thing  is  not  identical 
either  with  its  weight,  its  size,  or  the  materials  of  which  it 
is  composed.  If  it  luere,  identical  things  ivould  akvays  pos- 
sess identical  value.  For  instance,  a  bushel  of  corn  at  one 
time  and  place  has  the  same  weight  and  other  qualities 
which  it  has  at  another  time  and  place.  But  the  identical 
bushel  of  corn  has  one  value  in  Iowa  and  another  value  in 
Connecticut ;  thus  showing  that  identity  of  intrinsic  qual- 
ities, size  and  weight,  do  not  prove  an  identity  of  value. 
The  opponents  of  the  silver  dollar  are  constantly  saying 
that  its  value  has  "  depreciated  "  since  1873.  But  the  sil- 
ver dollar  of  to-day  is  composed  of  the  same  materials,  has 
the  same  weight  and  size,  and,  in  fact,  is  precisely  the  same 
"  invariable  "  dollar  that  it  was  prior  to  1873.  Its  identity  is 
unchanged.  In  1859  the  silver  dollar  of  412)^  grs.  was 
worth  5  22-100  per  cent,  more  than  the  gold  dollar  of 
25  8-10  grs.  At  present  the  bullion  value  of  the  gold 
dollar  is  worth  about  20  per  cent,  more  than  the  bullion 
value  of  the  silver  dollar.  While  this  change  of  about  25 
per  cent,  in  the  relative  value  of  the  gold  dollar  and  the 
silver  dollar  has  occurred,  not  the  slightest  change  has  taken 
place  in  the  relative  size,  weight,  color,  and  other  intrinsic, 
inherent  qualities  of  these  two  different  dollars. 

The  aforesaid  plain  fact  is  inexplicable  and  bewilder 
ing,  so  long  as  we  embrace  the  false  theory  that  value  is 
an  "  intrinsic  "  quality  of  gold  and  silver.  If  silver  had 
an  "  intrinsic  "  value,  circumstances  could  not  affect  its 
value  any  more  than  circumstances  can  change  its  color. 
If  every  nation  in  the  world  should  simultaneously 
enact  that  silver  should  henceforth  be  yellow,  it  would  not 
have  the  least  effect  on  the  color  of  silver.  Neither  could 
any  number  of  laws  have  the  faintest  tendency  to  make 
gold  less  malleable,  lighter,  or  possessed  of  any  intrinsic 
qualities  different  from  those  which  are  now,  and  always 
have  been  peculiar  to  that  metal.  The  change  which  has 
occurred -since  silver  was  demonetized  by  Germany  in  1872, 
in  the  relative  value  of  gold  and  silver  dollars  is  easily  un- 
derstood when  we  remember  that  value  is  never  an  intrinsic 


454 


SOCIAL  STRUGGLES. 


quality  of  anything ;  and  that  therefore  identical  things, 
possessed  of  identical,  intrinsic  qualities,  may  possess  widely 
different  values  at  different  times  and  under  the  influence 
of  different  laws,  conditions,  and  circumstances. 

DIFFERENCE   BETWEEN    MONEY   AND   OTHER   STANDARDS. 

The  difference  between  our  standard  of  weight  and  our 
so-called  standard  of  value  is  therefore  essentially  this,  viz.: 
The  numbers  of  the  standard  of  weight  have  no  effect 
whatever  upon  the  weight  of  that  standard.  But  the  num- 
bers of  the  standard  of  value  are  the  determining  fact  which 
regulates  the  value  of  this  supposed  standard  of  value. 

An  increase  in  the  number  of  gold  dollars  in  use  dimin- 
ishes the  value  of  each  one  of  them.  A  decrease  of  the 
number  of  gold  dollars  in  circulation  increases  the  value  of 
each  one  of  those  in  use.  Therefore  the  gold  dollar  is  a 
standard,  the  value  of  which  is  dependent  on  the  number 
of  those  standards  in  use.  It  is  a  condition  similar  to 
what  would  exist  if  the  length  of  a  yard-stick  were  depen- 
dent on  the  number  of  yard-sticks  in  use.  It  follows  that 
the  accuracy  of  what  is  commonly  called  a  "  measure  of 
value  "  does  not  depend  on  the  fact  that  it  is  always  com- 
posed of  the  same  thing,  but  on  the  number  of  those  things 
in  use. 

The  value  of  one  of  these  standards  is  affected  by  any- 
thing which  changes  the  relative  amount  of  gold  in  human 
possession  ;  such  as  the  vicissitudes  of  mining,  the  amount 
of  gold  consumed  in  the  arts,  and  the  arbitrary  demand 
which  may  be  created  for  that  metal  by  legislation.  But 
this  is  by  far  the  lesser  portion  of  the  total  sum  of  influ- 
ences which  operate  to  raise  or  lower  the  value  of  each  and 
every  ounce  of  gold  bullion  in  existence.  The  value  of 
such  bullion,  and  consequently  the  value  of  each  "dollar" 
made  from  it,  is  affected  just  as  directly  by  an  increased 
or  a  diminished  use  of  silver  dollars,  or  paper  dollars,  as  by 
an  increased  or  a  diminished  supply  of  gold  bullion. 

The  value  of  the  gold  "dollar"  therefore  rests  upon 
an  entirely  different   foundation   from    the  weight    of   the 


WHY  GOLD  CHANGES  IN  VALUE. 


455 


"pound,"  the  size  of  the  "gallon"  or  the  length  of  the 
"  foot."  It  is  an  invariable  thing,  zvith  a  variable  value. 
As  its  value  depends  upon  its  numbers,  the  only  way  to 
endow  it  with  a  fixed  value  would  be  to  create  a  uniformity 
in  its  numbers.  But  the  enormous  changes  constantly 
occurring  in  its  relative  supply  and  demand  render  such  a 
thing  impossible.  The  prime  difficulty  consists  in  the  fact 
that  we  cannot  control  the  amount  of  gold  bullion  in  the 
world  and  therefore  cannot  control  the  number  of  dollars 
which  shall  be  made  therefrom. 

If  it  were  feasible  to  keep  a  uniform  number  of  gold  dol- 
lars in  circulation,  the  value  of  each  one  of  those  "  stand- 
ards "  would  still  be  swayed  by  an  increased  or  diminished 
use  of  silver  as  money,  and  still  more  by  an  increased  or 
diminished  employment  of  paper  money.  No  fact  is  bet- 
ter established  than  that  the  value  of  gold  throughout  the 
world  is  raised  just  as  quickly  by  a  disuse  of  silver  as 
money  as  by  a  diminution  of  the  amount  of  gold  itself. 
Since  1872,  a  gigantic  experiment  has  been  made  by  sev- 
eral nations  which  has  demonstrated  this  point  beyond  a 
doubt.  Moreover,  it  is  perfectly  certain  that  an  increase 
or  a  diminution  in  the  total  amount  of  paper  money  in  use 
throughout  the  world  has  the  same  tendency  to  lower  or 
raise  the  value  of  money  made  of  gold  and  silver  as  an 
increased  or  a  diminished  supply  of  those  metals.  When 
we  remember  the  vast  amount  of  paper  money  in  circula- 
tion and  the  changes  occurring  in  its  volume,  the  potency 
of  this  cause  to  raise  or  lower  the  value  of  metallic  money 
is  apparent. 

SOME   RELATIVE   FACTS. 

The  aforesaid  facts  must  always  remain,  because  all 
things  are  relative,  and  a  diminished  or  an  increased  use 
of  one  of  two  things  which  are  both  used  for  a  similar  pur- 
pose must  inevitably  create  an  increased  or  a  diminished 
demand  for  the  other.  If  cotton  could  no  longer  be  used 
as  a  material  for  clothing,  the  demand  for  wool  would  be 
immediately  increased.     If  bituminous  coal  were  to  cease 


456 


SOCIAL  STRUGGLES. 


to  burn,  an  increased  demand  would  arise  for  anthracite 
coal.  The  increased  supply  of  petroleum  has  diminished 
the  value  of  other  illuminating  oils.  A  cheapening  of  steel 
rails  has  induced  some  railroads  to  discard  iron  rails  and 
replace  them  with  steel  ones.  Numerous  other  illustra- 
tions could  be  cited  to  show  the  familiar  fact  that  the 
amount  of  a  given  thing  may  be  but  little  changed  while 
its  value  is  either  raised  or  lowered  by  a  diminished  or  an 
increased  use  of  another  thing  which  performs  a  similar 
function  or  service. 

EFFECT   OF   PAPER   MONEY. 

Every  additional  means  of  dispensing  with  the  use  of 
gold  has  the  same  tendency  to  depress  its  value  and  keep 
it  from  rising  as  an  actual  increase  in  the  amount  of  gold 
would  have.  This  is  so  for  the  same  reason  that  every  ad- 
ditional means  of  dispensing  ^with  the  use  of  mahogany 
lumber  has  the  same  effect  on  its  value  that  an  actual  in- 
crease in  the  amount  of  such  lumber  would  have.  When 
the  volume  of  paper  money  throughout  the  world  is  in- 
creased, the  effect  on  prices  is  the  same  as  if  new  gold 
mines  had  been  discovered  and  an  additional  amount  of 
gold  bullion  put  on  the  market.  That  is,  the  addition  of 
a  considerable  amount  of  paper  money  to  the  circulation, 
no  matter  what  form  that  paper  money  assumes,  lowers  the 
relative  demand  for  gold  and  thus  lowers  its  value.  When 
free  commerce  exists  between  nations,  a  large  increase  in 
the  volume  of  paper  money  in  one  country  has  an  inevita- 
ble tendency  to  lower  the  value  of  gold  in  another  and  dis- 
tant country.  If  England  were  forced  into  a  desperate  war 
she  would  be  again  forced  to  do  as  she  and  other  nations 
have  generally  done  under  similar  circumstances,  viz.,  sus- 
pend specie  payments  and  issue  an  additional  amount  of 
paper  money.  This  procedure,  by  liberating  the  gold  now 
used  in  England,  would  tend  to  lower  its  value  in  the 
United  States.  In  other  words,  prices  in  this  country 
would  tend  upward.  More  gold  would  be  offered  for  sale, 
— part  of  the  stock  of  England  would  be   thrown  on  the 


EFFECT  OF  LOCKING  UP  GOODS. 


457 


market   and  consequently  each  ounce  would  bring  a  lower 
price. 

EFFECT   OF, HOARDING   GOLD. 

Gold  had  a  lower  value  in  the  United  States  in  1870  than 
it  had  in  1878.  Hoarding  gold  for  the  purpose  of  "resump- 
tion "  diminished  the  total  amount  of  that  metal  in  open  mar- 
ket for  sale.  This  hoarding  was  done  not  only  by  the  gov- 
ernment but  by  banks  and  private  individuals.  Hence  while 
the  premium  on  gold,  compared  with  greenbacks,  was  thir- 
teen per  cent,  in  October,  1870,  and  nothing  in  October, 
1878,  the  actual  value  of  gold  during  that  time  rose.  This 
is  unanswerably  shown  by  the  fact  that  the  average  scale  of 
the  prices  of  commodities  and  labor  steadily  fell  to  such  an 
extent  that  more  labor  and  commodities  were  required  to 
buy  a  given  number  of  ounces  of  gold  in  1878  than  in  1870. 
And  yet,  so  deluded  are  the  majority  with  the  idea  that  the 
so-called  "  par  value  "  of  gold  is  a  fixed  one,  that  it  was 
generally  imagined  that  the  "  resumption  process "  had 
cheapened  gold. 

In  fact,  great  numbers  of  newspapers  proclaimed  that 
"  the  Republican  party,  by  its  wise  policy,  had  so  cheap- 
ened gold  that  it  had  been  placed  within  the  reach  of  every 
laboring  man."  The  simple  fact  is  that  more  labor  was 
required  to  buy  25  8-10  grs.  of  gold  in  1878  than  in  1870. 
Wages  were  lower  in  1878  than  in  1870.  This  was  the  log- 
ical result  of  taking  a  considerable  portion  of  the  world's 
stock  of  gold  and  locking  it  up.  There  was  less  left  in 
open  market  to  be  taken  by  its  owners  to  the  mint  and  be 
converted  into  the  so-called  standard  of  value,  and  then 
offered  for  sale.  A  similar  result  would  be  produced  if  a 
considerable  amount  of  the  world's  stock  of  any  other  com- 
modity were  locked  up.  Until  the  equilibrium  can  be 
restored  by  production,  the  value  of  a  commodity,  when 
a  considerable  portion  of  it  is  withdrawn  from  market,  is  in- 
creased. In  case  of  gold,  the  exhaustion  of  the  gold  mines 
renders  the  effect  of  locking  it  up  far  greater  than  the  effect 
of  locking  up  a  commodity,  like  wheat,  which  can  be  pro- 


458 


SOCIAL  STRUGGLES. 


duced  in  a  year.  To  a  considerable  extent,  every  million 
of  gold  locked  up  is  practically  destroyed,  so  far  as  the  im- 
mediate scale  of  prices  is  concerned.* 

Prices  are  merely  a  mode  of  stating  the  average  judg- 
ment of  mankind  in  regard  to  the  value  of  the  money  in 
which  those  prices  are  paid.  Fluctuations  in  prices  are 
therefore  a  practical  reflection  of  the  fluctuations  in  the 
value  of  the  so-called  standard  of  value,  no  matter  what 
that  standard  may  be  composed  of. 

WHY   PRICES   CHANGE. 

The  foregoing  considerations  explain  why  the  commercial 
w^orld  is  subject  to  such  great  and  frequent  changes  in  the 
prices  of  commodities ; — fluctuations  which  are  evidently 
not  dependent  on  an  increased  or  diminished  supply  of 
those  commodities.  The  size  of  "  bushels  "  and  the  weight 
of  "  pounds  "  do  not  change,  because  we  have  adopted  in- 
variable standards  for  measure  and  weight.  But  our  stand- 
ard of  value  is  an  elastic  one ;  it  diminishes  in  value  when 
the  number  of  those  standards  increase,  and  it  increases  in 
value  when  the  number  of  those  standards  diminish.  The 
unfailing  mirror  of  these  changes  in  this  pretended  "  stand- 
ard "  is  the  average  scale  of  market  prices.  When  flour 
rose  to  $400.00  per  barrel  in  Confederate  money,  it  simply 
denoted  that  the  number  of  standard  dollars  in  the  Confed- 
eracy had  increased.  When  wheat  is  sold  in  New  York  for 
ninety  cents  a  bushel,  and  all  other  things  at  correspond- 
ingly low  prices,  it  shows  that  the  number  of  "  standards  " 
has  diminished.  The  notorious  instability  of  prices  and  the 
great  losses  to  which  persons  are  thereby  made  liable  who 
are  obliged  to  sell  their  goods  before  a  certain  time,  has 
given  rise  to  the  proverb  :  "  Out  of  debt,  out  of  danger." 

*  The  following  statement,  made  September  11,  1886,  shows  what  a 
large  amount  of  money  was  then  locked  up  in  New  York  City  alone. 

Reserve  in  banks,  $73,159,400  in  specie  and  120,901,800  in  greenbacks  ; 
a  total  of  $94,061,200. 

Treasury  statement :  $157,246,358  in  gold,  $36,106,591  in  greenbacks 
and  $95,567,217  in  silver.     Total  in  banks  and  Treasury,  $382,981,366. 


FLUCTUATIONS  OF  PRICES. 


459 


The  instability  of  prices  has  been  more  or  less  observed 
by  every  intelligent  business  man.  But  the  fact  that  these 
fluctuations  are  largely  caused  by  changes  in  the  value  of 
what  is  called  the  "  standard  of  value,"  has  attracted  com- 
paratively little  attention.  If  it  had,  this  nation  would  not 
have  tolerated  a  monetary  chaos,  a  condition  in  which  the 
value  of  all  property  compared  with  money  is  subject  to 
constajit  and  excessive  changes. 

CHANGES  IN  THE  NUMBER  OF  STANDARDS. 

Mr.  Alexander  Del  Mar,  in  his  interesting  and  valuable 
book,  "The  Science  of  Money,"  furnishes  a  table  which 
shows  that  the  number  of  "units  of  value,"  to  wit,  "dol- 
lars" in  circulation  in  this  country,  in  proportion  to  the 
number  of  inhabitants,  has  been  subject  to  great  variations. 
Among  other  things,  it  appears  from  the  figures  of  this 
careful  statistician,  that  the  amount  of  money  in  circulation 
in  this  country  in  proportion  to  the  population,  has  varied 
from  $4.60  per  head  in  1803,  to  $13.40  per  head  in  1839; 
from  $6.90  per  head  in  1843,  to  $1  i.io  per  head  in  1848,  and 
to  $28.50  per  head  in  1864.  Furthermore  it  appears  that 
there  has  been  a  direct  relation  between  the  rise  and  fall  of 
prices  which  have  marked  different  periods,  and  an  in- 
crease or  a  diminution  of  the  amount  of  money  in  circula- 
tion at  those  periods. 

That  its  wealth  and  commerce  are  as  important  factors 
in  determining  the  amount  of  money  needed  by  a  nation, 
as  its  population,  no  intelligent  person  will  deny.  But  Mr. 
Del  Mar's  figures  show  great  differences  in  the  amount  of 
money  per  head,  at  times  so  close  to  each  other  as  to  pre- 
clude all  probability  of  any  material  change  having  mean- 
while occurred  in  the  national  wealth  and  commerce. 

There  is  another  very  important  thing  not  expressed  by 
the  said  table,  and  which  it  is  difficult  to  state  accurately. 
That  is  the  well-known  fact  that,  whenever  the  public 
become  alarmed  and  fear  a  sudden  and  intense  demand  for 
legal  tender,  a  large  amount  of  money  is  at  once  hoarded 
and   the  trouble  thereby  aggravated.     For  the  time  being, 


460 


SOCIAL  STRUGGLES. 


such  a  proceeding  practically  diminishes  the  number  of 
dollars  in  circulation,  nearly  as  effectually  as  if  they  were 
destroyed.  The  frightful  sacrifices  sometimes  incurred  by 
debtors  forced  to  sell  their  property  in  such  times  of  con- 
traction give  emphatic  confirmation  to  the  statement  that 
the  numbers  of  our  so-called  "  standard  of  value  "  are  in 
reality  the  determining  condition  which  regulates  their 
actual  value.  And  as  heretofore  pointed  out,  the  use  of  a 
currency  of  which  only  a  portion  is  a  full  legal-tender 
money  enormously  increases  the  contraction  resulting  from 
a  panic.  In  such  times,  business  men  do  not  want  fair 
weather  currency ;  they  want  legal-tender  money  with 
which  debts  can  be  paid  either  with  or  without  the  cred- 
itor's consent. 

SILVER  AND  GOLD  ARE  GOVERNED  BY  THE  SAME  NATURAL 

LAW, 

That  the  value  of  the  silver  dollar  depends  on  its  numbers 
and  not  on  its  intrinsic  qualities  is  just  as  true  as  that  the 
value  of  the  gold  dollar  is  thus  determined  Many  persons 
imagine  the  silver  dollar  was  an  invariable  standard  of  value 
up  to  1873.  This  mistake  arises  chiefly  from  the  fact  that, 
until  silver  was  demonetized,  the  value  of  the  silver  dollar, 
in  effect,  was  usually  measured  by  comparing  it  with  the 
bullion  contained  in  a  silver  dollar ;  which,  in  reality,  under 
free  coinage  is  simply  a  comparison  of  one  silver  dollar  with 
another  silver  dollar,  a  mode  of  comparison  heretofore 
shown  fallacious.  The  silver  dollar,  for  reasons  heretofore 
stated,  is  less  variable  in  value  than  the  gold  dollar.  But 
the  essential  cause  of  this  superior  stability  is  not  due  to  an 
intrinsic  value  in  the  silver  dollar,  but  to  the  greater  proba- 
bility of  the  number  of  such  dollars  being  uniform.  It  fol- 
lows that  any  condition  which  renders  the  number  of  silver 
dollars  more  unstable  must  necessarily  render  the  value  of 
each  one  of  those  dollars  more  unstable.  And  it  also 
follows  that  changes  in  the  amount  of  paper  money  must 
always  affect  the  value  of  silver  dollars  in  a  manner  similar 
to  the  way  that  the  value  of  the  gold  dollar  is  thus  affected. 


WISDOM  OF  THE  CONSTITUTION.  461 

DUTY   OF   CONGRESS, 

The  United  States  Constitution  provides  that  "  Congress 
shall  have  power  to  coin  money  and  regulate  the  value 
thereof."  Heretofore,  Congress  has  coined  money  but  it 
has  neglected  its  power  and  duty  to  "  regulate  the  value 
thereof."  This  omission  is  almost  entirely  due  to  the 
ignorance  of  monetary  principles  which  has  prevailed 
among  our  "  statesmen."  They  have  been  mostly  oblivious 
of  the  simple  fact  that  to  "  regulate  the  value  thereof  " 
means  that  the  number  of  dollars  in  circulation  should  be 
regulated,  as  there  are  no  other  possible  means  whereby 
Congress  can  control  the  value  of  one  of  the  national 
dollars. 

IMPORTANCE   OF  THE   DOLLAR  HAVING  A  UNIFORM  VALUE. 

The  word  ''dollars,"  in  this  country,  is  the  term  applied 
to  that  form  of  capital  through  the  help  and  intervention 
of  which  one  form  of  capital  associates  with  all  other  forms 
of  capital,  one  kind  of  labor  associates  with  all  other  kinds 
of  labor,  and  all  forms  of  capital  hold  commercial  inter- 
course and  association  with  all  kinds  of  labor.  Labor  may 
be  compared  to  one  pulley,  capital  to  another  pulley,  and 
"dollars"  to  the  belt  which  connects  those  pulleys  to- 
gether. Consequently,  any  material  change  in  the  value  of 
each  one  of  those  dollars  has  an  inevitable  tendency  to  de- 
range the  industrial  machinery  whose  motion  depends  on 
the  uniformity  of  their  value.  Combinations  of  laborers 
may  temporarily  keep  wages  from  falling  ;  but,  if  the  cur- 
rency be  steadily  contracted,  wages  must,  sooner  or  later, 
be  reduced  to  correspond  with  the  diminution  of  currency, 
just  as  certainly  as  _wages  increase  when  the  currency  is 
expanded. 

Of  all  things  produced  in  this  wide  land,  labor  is  the 
most  perishable.  It  must  be  profitably  employed  every 
day  or  it  goes  to  waste  without  benefiting  any  one.  Every 
idle  day  spent  by  a  man  whose  health  and  strength  fit  him 
for  labor  is  a  waste  of  national  wealth  to  the  extent  that 


462 


SOCIAL  STRUGGLES. 


his  labor  might  have  created  it.  A  million  idle  men,  each 
of  whom  might,  if  employed,  daily  create  a  dollar's  worth  of 
wealth,  are  a  clear  loss  of  a  million  dollars  every  day  they 
remain  idle. 

It  follows  from  the  foregoing  premises,  that  nothing  is 
more  expensive,  nothing  is  more  wasteful,  than  for  a  na- 
tion to  neglect  measures  which  will  tend  to  keep  the  belt 
which  connects  labor  and  capital  of  a  uniform  length  and 
efificiency.  And  our  analysis  of  the  matter  shows  this  can 
only  be  done  by  maintaining  the  greatest  attainable  uni- 
formity in  the  number  of  dollars  in  circulation,  relative  to 
the  commercial  and  industrial  need  of  those  dollars.  If  the 
total  number  of  dollars  always  bore  a  uniform  relation  to 
the  demand  for  them,  there  would  never  be  any  fluctuation 
in  the  value  of  one  of  those  dollars.  If  "dollars"  were 
always  of  the  same  value,  there  would  be  no  changes  in  the 
general  scale  of  the  prices  of  commodities  and  labor.  In- 
dividual articles,  in  consequence  of  greater  scarcity  or  abun- 
dance, would  fluctuate  in  value  to  some  extent.  Invention 
and  machinery  would  then,  as  now,  lower  the  prices  of  some 
things.  But  the  average  rate  of  prices  would  remain  uni- 
form. As  the  prices  of  commodities  would  be  more  nearly 
uniform  than  at  present,  the  rate  of  wages  would  also  be- 
come more  stable,  and  the  industrial  strifes  now  constantly 
occurring  between  employers  and  laborers  would  be  less  in- 
tense. Real  estate  would  also  be  far  more  stable  in  value 
than  at  present.  The  growth  of  population  and  wealth 
would  cause  a  steady  rise  in  the  value  of  some  lands ;  but 
the  fluctuations  which  now  characterize  the  real  estate  mar- 
ket would  mostly  disappear.  The  amount  of  business  trans- 
acted by  what  are  now  essentially  gambling  institutions, 
called  "stock  exchanges,"  would  be  reduced  to  a  small 
fraction  of  its  present  volume.  All  the  above  statements 
are  evident  when  we  bear  in  mind  that  the  average  market 
quotations  are  the  invariable  reflection  of  the  value  of  each 
one  of  the  dollars  in  which  those  quoted  prices  are  stated. 
The  same  cause  must  always  produce  the  same  result. 


WHA  T  WILL  BE  SEEN. 


46- 


THE   CENTRAL   QUESTION. 

The  considerations  aforesaid  lead  us  to  conclude  that  the 
central  question  which  must  eventually  engross  the  national 
attention  is  not :  Of  what  materials  shall  we  make  our  dol- 
lars ?  The  great  problem  will  be  seen  to  be :  WJiat  number 
of  dollars  shall  constitute  our  currency;  and  hoiv  shall  this 
number  be  increased  or  diminished  so  that  its  relation  to  our 
population,  xvealth  and  commerce  zvill  remain  uniform  ? 

Hitherto,  the  real  question  before  us  has  attracted  com- 
paratively little  attention.  If  it  had  the  present  chaotic 
condition  of  our  finances  w^ould  not  exist.  We  have 
created  so-called  "  standards  of  value  "  and  then  left  the 
essential  thing,  to  wit,  the  number  of  those  standards,  to 
chance  ;  to  the  precarious  and  fluctuating  supply  of  gold 
and  silver  by  reason  of  changes  in  the  amount  of  those 
metals  produced  from  the  mines,  changes  in  the  amount 
consumed  in  the  arts,  and  changes  in  the  demand  for  them 
by  reason  of  the  action  of  foreign  governments  and  people. 
We  have  allowed  the  most  important  factor  in  social  and 
commercial  progress,  to  wit,  our  money,  our  means  of  stat- 
ing the  equities  between  millions,  to  be  helplessly  subject 
to  the  caprice  of  uninstructed  legislators  and  the  intrigues 
and  schemes  of  classes  selfishly  interested  in  changing  the 
value  of  each  one  of  our  "  standards "  so  cunningly  and 
silently  that  the  process,  except  by  a  few,  would  be  unob- 
served until  accomplished. 

FRUIT   OF   A   FALSE   PREMISE. 

This  colossal  blunder  is  almost  entirely  traceable  to  the 
false  fundamental  premise  that  gold  and  silver  contain  an 
intrinsic  value,  and  that  consequently,  each  standard  coin, 
under  all  circumstances,  is  an  invariable  measure  of  value. 
The  fact  that  a  large  number  of  persons  have  recently 
changed  a  belief  in  the  fixed  intrinsic  value  of  both  gold 
and  silver  to  a  belief  in  the  fixed  intrinsic  value  of  gold 
alone,  intensifies  the  practical  effect  of  this  blunder  without 
substantially  changing  its  origin  and  nature. 


464 


SOCIAL  STRUGGLES. 


Regulation  of  the  mnnbcr  of  our  standards  of  value  is  the 
essential  feature  of  our  monetary  problem.  The  materials 
of  which  we  shall  make  "  dollars "  will  depend  upon  the 
popular  intelligence  in  regard  to  finance  ;  upon  habit,  prej- 
udice and  sentiment,  and  upon  future  discoveries  and  in- 
ventions. The  task  before  us  is  clear,  but  its  magnitude  is 
so  great  that  no  one  man  or  body  of  men  can  at  once  con- 
clude it.  Its  final  solution  will  be  reached  whenever  the 
attention  of  a  large  number  of  intelligent  minds  is  concen- 
trated upon  it  for  a  considerable  time. 

MONEY    MUST   BE   ADAPTED   TO    PUBLIC   INTELLIGENCE. 

Money  is  both  an  evidence  and  a  form  of  human  prog- 
ress and  development.  Consequently,  a  particular  financial 
system  cannot  be  arbitrarily  created  and  put  in  successful 
operation  ; — it  must  be  a  natural  outgrowth  of  the  society 
whose  commerce  it  is  intended  for.  The  practical  question 
then  is  not:  What  is  the  most  perfect  financial  system? 
but  it  is :  What  monetary  system  is  best  adapted  to  our 
present  stage  of  national,  commercial,  and  intellectual  de- 
velopment ? 

Human  nature  in  all  generations  is  the  same.  Therefore, 
it  is  inevitable  that  all  propositions  to  reform  our  money 
will  be  bitterly  opposed,  for  reasons  similar  to  those  which 
have  always  engendered  resistance  to  all  forms  of  progress. 
A  large  amount  of  legislation  in  force  in  England  and  other 
European  countries,  which  full  experience  has  shown  to  be 
salutary,  was  enacted  in  contempt  of  the  opinions  and  ad- 
vice of  the  so-called  "political  economists." 

When  Robert  Stephenson  was  engaged  in  his  long  weary 
struggle  to  improve  facilities  for  transportation,  his  chief 
opponents  were  men  who  professed  to  know  all  about  the 
subject.  No  class  denounced  railroads  as  impracticable 
and  unscientific  with  so  much  confidence  and  vehemence 
as  the  men  who  called  themselves  "  scientific  engineers." 

History  will  certainly  repeat  itself.  We  may  safely  pre- 
dict that  monetary  reform  will  be  most  zealously  opposed 


NEED  OF  CONFERRING   WITH  EACH  OTHER. 


465 


by  those  who  profess  a  ''  scientific  "  knowledge  of  the  sub- 
ject. Their  pride  and  self-interest  will  instinctively  lead 
them  to  discredit  ideas  which,  if  generally  believed,  would 
practically  result  in  damaging  their  reputation  for  learning 
and  acumen.  By  the  average  man,  no  task  is  more  reluc- 
tantly performed  than  to  admit  his  opinions  erroneous. 
Especially  is  this  so  when  he  has  pretended  to  be  an  au- 
thority and  has  in  reality  taught  falsehood. 

FINANCIAL     MEASURES     SUGGESTED     FOR     CONSIDERATION 
AND   AMENDMENT. 

Whoever  states  his  opinion  in  regard  to  the  financial 
policy  of  this  nation  necessarily  subjects  himself  to  the  im- 
putation of  being  presumptuous.  As  the  opinion  of  a  sin- 
gle individual  on  a  subject  of  such  importance  is  of  little 
weight,  a  criticism  of  that  kind,  in  one  sense,  is  a  just  one. 
But  if  this  consideration  deterred  every  one  from  express- 
ing his  views,  there  would  be  no  opportunity  for  a  compar- 
ison of  ideas  and  the  mutual  instruction  resulting  therefrom. 
Therefore,  more  fully  than  heretofore,  some  financial  meas- 
ures are  presented  for  consideration. 

First.  Withdraw  from  circulation  all  the  national  bank- 
notes and  all  the  existing  greenbacks.  This  withdrawal 
would  necessarily  require  considerable  time  for  its  accom- 
plishment. 

Second.  Issue  a  new  form  of  greenbacks  to  the  extent 
of  fifteen  dollars  per  head  of  the  population  of  the  United 
States,  and  so  regulate  the  amount  of  those  greenbacks  as 
to  always  keep,  as  closely  as  practicable,  that  amount  and 
ratio  of  absolute  paper  money  relative  to  the  population, 
in  circulation,  and  no  more.  These  greenbacks,  in  order  to 
avoid  either  a  contraction  or  an  inflation  of  the  total 
volume  of  paper  money,  to  be  issued  simultaneously  with 
the  cancelation  of  the  present  greenbacks  and  bank-notes. 
The  greenbacks  used  to  replace  canceled  bank-notes  could 
be  put  in  circulation  by  buying  United  States  interest-bear- 
ing bonds  in  open  market  and  then  destroying  the  bonds. 
30 


466  SOCIAL  STRUGGLES. 

THE   PROPER   INSCRIPTION. 

A  one  dollar  greenback  of  this  new  issue  to  bear  an 
inscription  similar  to  that  on  all  other  denominations  ;  to 
wit,  "UNITED  STATES  OF  AMERICA,  ONE  DOL- 
LAR. This  is  a  legal  tender  at  its  face  value  for  all  debts 
and  dues  both  public  and  private,  except  in  case  of  specific 
contracts  entered  into  before  the  passage  of  an  Act  of  Con- 
gress, approved authorizing  the  issue  of  this  dol- 
lar." 

It  may  be  asked :  What  foundation  would  the  value  of 
such  paper  dollars  rest  upon  ?  The  answer  is  obvious  ;  viz., 
upon  the  desire  of  mankind  to  possess  a  medium  of  ex- 
change ;  upon  the  need  of  money. 

It  furthermore  may  be  asked  :  Is  not  a  human  desire  and 
need  a  slender  foundation  upon  which  to  rest  a  national 
currency?  To  this  question  a  moment's  reflection  furnishes 
a  complete  reply.  Said  foundation  is  precisely  the  one 
upon  which  all  values  rest.  The  value  of  wool  depends  on 
human  desire  for  cloth, — upon  the  need  of  woolen  cloth- 
ing. The  value  of  houses  rests  on  human  desire  for  a  com- 
fortable abode,  upon  the  need  of  a  shelter  from  the  inclem- 
ency of  the  weather.  All  values  of  every  kind  and  nature 
have  no  foundation  and  basis  whatsoever  but  human 
desire  and  human  need. 

After  the  aforesaid  change  was  accomplished  we  should 
have  comparatively  but  little  more  paper  money  than  we 
now  have ;  but,  in  several  important  respects,  it  would  be 
superior  to  that  now  in  circulation.  It  would  all  be  a  legal 
tender  for  all  purposes,  with  the  unimportant  exception  of 
previously  contracted  debts  by  their  terms  payable  in  coin. 
Lapse  of  time  would  soon  render  this  exception  unneces- 
sary. To  a  large  extent  our  present  paper  money  is  fair 
weather  money.  The  national  bank-notes  pass  current  for 
payment  of  all  private  debts  so  long  as  business  moves 
along  smoothly.  But  the  moment  apprehension  fills  the 
minds  of  men  owing  debts  which  a  failure  to  pay,  at  a  spe- 
cified time,  will  involve  them  in  a  loss  of  credit  and  possible 


NEED  OF  REMOVING  TEMPTATION. 


467 


bankruptcy,  such  non  legal-tender  currency  is  "  like  a  broken 
tooth  and  a  foot  out  of  joint."  It  is  a  false  friend.  Even 
the  greenbacks,  under  our  present  laws,  would  cease  to  be 
a  legal  tender  at  the  custom  house,  if  specie  payments  were 
suspended.  Business  men  would  have  far  greater  security 
than  they  now  have,  if  the  money  they  handled  were  all  a 
legal  tender.  No  danger  would  then  exist  of  being  caught 
with  a  note  to  be  paid  and  nominally  enough  money  to 
pay  it  with,  and  then  have  part  of  the  money  rejected 
because  not  a  full  legal  tender. 

The  amount  of  paper  money  in  circulation  would  be  far 
more  uniform  than  at  present.  We  now  regulate  the 
amount  of  bank-notes  by  the  so-called  "redemption"  proc- 
ess. National  bankers,  as  a  class,  have  been  continually 
inveighing  against  the  greenbacks ;  but  whenever  an  in- 
creased demand  exists  for  legal-tender  money,  they  at  once 
hoard  greenbacks  and  contract  the  amount  of  bank-notes. 
They  do  this  to  place  themselves  in  better  position  to 
"  redeem "  bank-notes  in  greenbacks.  Their  conduct  is 
guided  by  self-interest,  without  the  slightest  regard  to  the 
best  interests  of  the  community  from  whom  they  derive 
their  profits.  Temptation  to  act  in  this  manner  would  be 
removed  by  taking  away  from  the  national  banks  the  privi- 
lege of  issuing  paper  money. 

The  expensive  machinery  of  redemption  of  bank-notes, 
collection  of  taxes  on  circulation,  examination  of  amount 
of  greenbacks  held  by  the  banks,  etc.,  could  all  be  dis- 
pensed with  by  a  direct  issue  from  the  Treasury  of  all  paper 
money.     This  would  lessen  the  number  of  office-holders. 

A  nation  which  attempts  to  regulate  the  amount  of  its 
paper  money  by  what  is  called  "specie  payments"  must 
subject  itself  to  the  great  expense  of  keeping  constantly  in 
the  Treasury  vaults  a  large  amount  of  idle  coin.  No  one 
pretends  that  the  United  States  can  safely  carry  on  the 
specie  payment  system  with  less  than  one  hundred  millions 
of  idle  coin.  In  fact  we  have  now  about  two  hundred  and 
fifty  millions  thus  lying  idle.     At  the  low  rate  of  three  per 


468 


SOCIAL  STRUGGLES. 


cent,  per  annum,  the  interest  of  these  large  sums  is  a  heavy- 
national  burden. 

If  we  regulated  the  amount  of  our  paper  money  without 
recourse  to  the  "  redemption  "  method,  we  should  rid  our-^ 
selves  of  the  danger  now  constantly  present,  that  war,  or 
severe  financial  disturbance  in  foreign  nations,  will  drain 
away  a  sufficient  amount  of  coin  to  cause  an  involuntary 
suspension  of  specie  payments  with  its  attendant  industrial 
and  commercial  derangement. 

It  would  also  be  a  great  advantage  to  the  nation  to  be 
rid  of  a  class  of  men  whose  selfish  interests  prompt  them 
to  continually  plot  against  the  welfare  of  the  industrial 
classes.  When  the  unjust  privilege  of  issuing  money  is 
taken  from  the  banks,  one  such  class  will  disappear. 

Third.  Restore  the  coinage  of  silver  to  its  ancient  and 
rightful  position.  Make  the  coinage  of  the  silver  dollar 
unlimited  with  no  charge  for  coinage  beyond  the  attendant 
expense.  Those  who  fear  a  *'  flood  of  silver  dollars  "  should 
ask  themselves  :  Where  is  the  silver  bullion  to  come  from 
wherewith  to  coin  the  "flood"?  By  no  possibility  could 
silver  dollars  be  worth  less  than  the  bullion  from  which 
they  are  coined.  To-day  (Nov.,  1885),  the  bullion  in  a  sil- 
ver dollar  has  a  higher  value  than  the  gold  dollar  had  in 
1873.  Thus  if  the  "flood  "  came  it  would  have  the  effect 
which  a  flood  of  gold  dollars  would  have  had  in  1873.  The 
absurdity  of  talking  about  the  wrongs  which  creditors  would 
suffer  if  paid  in  silver  dollars  worth  more  than  the  gold  dol- 
lar was  in  1873,  is  apparent. 

Fourth.  Discontinue  the  coinage  of  the  silver  half  dol- 
lar and  coin  those  existing  into  standard  silver  dollars. 
Instead,  issue  paper  money  of  the  denomination  of  half 
dollars  to  such  amount  as  the  people  wish  to  pay  for  in 
dollars.  Such  fractional  money  to  be  exchangeable,  at  the 
pleasure  of  its  holders,  for  any  other  kind  of  national 
money  and  to  be  a  legal  tender  for  all  purposes  to  the 
extent  of  ten  dollars. 

Fifth.  Issue  coin  certificates,  payable  on  demand,  at  the 
option  of  the  Government,  in  either  gold  or  silver,  to  any 


WHAT  IS  NECESSARY. 


469 


one  who  chooses  to  deposit  either  silver  or  gold  dollars  in 
the  United  States  Treasury.  Said  certificates  to  be  limited 
only  by  the  number  of  dollars  thus  deposited  ;  and  to  be 
of  denominations  of  two,  five,  ten,  twenty-five,  one  hun- 
dred and  one  thousand  dollars. 

A   PERFECT   CURRENCY. 

The  reader  may  ask :  Would  a  compliance  with  the 
aforesaid  suggestions  create  a  currency  of  a  perfectly  uni- 
form value?  I  answer,  No.  In  order  to  make  dollars  of 
uniform  value,  the  Government  must  make,  not  a  part,  but 
all  of  them  from  a  material  over  which  it  has  complete  con- 
trol. It  must  have  intelligence  enough  to  maintain  a  uni- 
form relation  between  the  number  of  those  dollars  and  the 
amount  of  exchanges  effected  therewith.  It  must  have 
integrity  and  watchfulness  over  the  welfare  of  all  sufificient 
to  resist  class  importunities  and  appeals  for  either  an 
increase,  or  a  diminution  of  the  relative  number  of  dollars 
in  circulation  ;  and  it  must  have  stability  and  power 
enough  to  prevent  counterfeiting  and  to  enforce  its  decrees 
in  all  respects. 

Why  then  make  the  foregoing  suggestions?  Because 
they  would  create  a  currency  of  far  more  uniform  value 
than  the  one  we  now  have,  and,  in  all  probability,  as  stable 
a  currency  as  the  American  people  are  now  qualified  to  or- 
dain and  maintain.  At  present  the  total  number  of  dollars 
in  circulation  fluctuates  from  two  causes ;  to  wit,  alterations 
in  the  number  of  paper  dollars,  and  changes  in  the  number 
of  metallic  dollars.  And  our  financial  history  shows  that 
greater  changes  have  occurred  in  the  number  of  paper 
dollars  than  in  the  number  of  metallic  dollars.  Under  a 
system  similar  to  that  above  outlined,  the  number  of  paper 
dollars  would  be  substantially  a  fixed  one.  It  would  not 
always  bear  the  same  relation  to  the  commerce  of  the 
country,  but  it  would  to  the  population,  and  this  would 
give  it  a  far  more  invariable  quality  than  has  ever  been  pos- 
sessed by  any  paper  money  in  the  United  States. 

The  changes  in  the  total  number  of  our  dollars,  instead 


.-Q  SOCIAL  STRUGGLES. 

of  arising  from  TWO  sources  as  at  present,  would  then  arise 
from  only  ONE  cause  ;  to  wit,  alterations  in  the  number  of 
metallic  dollars.  Financial  disturbances  in  foreign  nations, 
then,  as  now,  could  change  the  number  of  our  metallic  dol- 
lars. But,  unlike  the  present,  such  events  would  not  have 
the  slightest  effect  on  the  number  of  our  paper  dollars, 
which  would  form  the  major  portion  of  the  total  number  of 
dollars. 

SUCCESSFUL  USE  OF  PAPER  MONEY  REQUIRES  INTELLI- 
GENCE. 

Philosophic  and  profound  writers  on  Finance  have  stated 
that  the  use  of  gold  and  silver  as  money  is  a  relic  of  bar- 
barism which  will  eventually  disappear.  This  is  undoubt- 
edly true.  But,  instead  of  being  a  conclusive  reason 
against  our  further  employment  of  those  metals,  as  money, 
it  is  an  unanswerable  argument  in  favor  of  their  use  at  pres- 
ent. For,  in  fact,  we  have  not  yet  emerged  from  barbar- 
ism ;  we  are  merely  emerging  from  that  state.  We  have 
only  partially  rid  ourselves  of  barbaric  customs,  laws,  and 
ideas.  What  will  the  historians  of  the  thirtieth  century  say 
of  a  people  among  whom  the  possession  of  wealth,  no  mat- 
ter how  obtained,  insured  distinguished  social  considera- 
tion and  was  a  sufficient  qualification  to  enable  an  ignorant 
man  to  become  governor  of  a  State,  a  United  States  sena- 
tor, or  obtain  other  high  official  positions? 

A  great  moralist  has  said  that  "  national  amusements  are 
an  unerring  index  of  national  civilization."  Judged  by  this 
criterion,  we  are  but  little  removed  from  the  ignorance  and 
brutality  of  ancient  nations  whose  highest  pleasure  was  found 
in  witnessing  savage  and  bloody  combats  between  man  and 
man  and  between  men  and  wild  beasts.  Our  newspapers 
print  what  is  known  will  please  a  large  portion  of  their 
readers.  They  daily  contain  accounts  of  disgusting  prize 
fights  between  brutes  in  human  form,  and  of  revolting 
struggles  between  dogs  more  refined  than  those  who  urge 
them  to  mutilate  and  kill  each  other.  The  percentage  of 
our  population  which  does  not  take  pleasure  in  the  "  sport  " 


THE  FUTURE  MONEY. 


471 


of  maiming  and  murdering  inoffensive  and  defenseless  birds 
and  animals  is  deplorably  small. 

A  few  years  ago  a  man,  clearly  and  palpably  insane, 
wounded  the  President  of  the  United  States.  After  a  con- 
siderable time,  his  death  ensued.  The  correctness  of  the 
President's  medical  treatment  was  questioned  by  some  of 
the  most  distinguished  practitioners  in  the  world.  Not- 
withstanding these  facts,  the  majority  of  the  American  peo- 
ple, from  one  end  of  the  land  to  another,  howled  like  a 
pack  of  hungry  wolves  for  the  gratification  of  having  a  poor 
helpless  wretch  barbarously  put  to  death.  But  enough  of 
such  humiliating  facts.     Why  recite  a  hundred  more  ? 

WHAT   WILL   ULTIMATELY   OCCUR. 

Whenever  the  people  of  the  United  States  become  suf- 
ficiently intelligent  to  create  and  maintain  a  currency  com- 
posed entirely  of  absolute  paper  money  they  will  relegate 
gold  and  silver  to  their  final  and  proper  position.  Both 
gold  and  silver  will  be  demonetized.  Those  metals  will 
then  occupy  precisely  the  same  relation  in  the  business 
and  commercial  world  that  are  now  occupied  by  iron,  tin, 
copper,  quicksilver,  platinum,  zinc  and  other  metals.  They 
will  be  commodities  bought  and  sold  by  weight  and  their 
price  will  be  stated,  not,  as  at  present,  by  fractions  and  pieces 
of  themselves,  but  by  the  units  of  an  absolute  paper  money, 
automatically  regulated  in  amount.  An  increase  or  a  de- 
crease of  the  amount  of  those  metals  in  the  country  might 
then  affect  the  value  of  a  pound  of  one,  or  both  of  them, 
but  would  have  no  influence,  as  at  present,  upon  the  value 
of  all  other  commodities  in  the  land.  The  solvency  or 
bankruptcy  of  large  numbers  of  business  men  would  not 
then,  as  now,  depend  on  the  occurrence  of  events  in  some 
part  of  the  world  which  created  an  increased  or  a  dimin- 
ished demand  for  one  or  two  things ;  to  wit,  for  silver  or 
gold.  The  absurdity  of  placing  the  vast  equities  constantly 
existing  between  sixty  millions  of  people,  in  their  manifold 
business  and  commercial  associations,  at  the  mercy  and 
upon  the  hazard  of  a  rise  or  fall  in  the  value  of  one  or  two 


472 


SOCIAL  STRUGGLES. 


commodities  would  then  become  apparent.  Wonder  would 
then  arise  how  such  a  crude  mode  of  estimating  what  jus- 
tice required  one  person  should  receive  from  another,  could 
have  been  so  long  in  existence. 

A  child  cannot  be  made  able  to  walk  by  placing  it  in  the 
middle  of  a  room  and  ordering  it  to  walk.  Ability  to  walk 
is  an  attainment  made  possible  only  by  the  infant's  gradual 
development  and  no  arbitrary  means  can  otherwise  hasten 
it. 

The  people  of  the  United  States  are  now  probably  far 
enough  developed  to  make  a  portion  of  their  money  on  cor- 
rect principles.  After  that  step  has  been  taken  and  has 
given  the  general  satisfaction  which  it  inevitably  would,  a 
popular  demand  for  an  extension  of  the  system  of  absolute 
paper  money  would  arise.  The  first  step  in  the  right  di- 
rection is  therefore  the  essential  one.  All  others  will  nec- 
essarily follow  the  progress  made  in  acquiring  and  practi- 
cally using  a  knowledge  of  true  financial  principles.  What 
are  now  called  "  obscure  financial  problems  "  will  then  be 
dismissed  to  the  limbo  now  occupied  by  many  "  problems  " 
which  puzzled  mankind  in  the  year  1300. 


CHAPTER  XXI. 

Ought  the  United  States  maintain  the  Gold,  and.  the  Silver  Dollar  at  an 
Equality  of  Value  ? — Folly  of  Blindly  imitating-  other  Nations. — 
What  We  have  Actually  done. — What  We  should  now  do. — How 
Foreign  Commerce  is  Conducted.— Foreign  Trade  is  a  Barter  of  one 
Thing  for  Another. — The  Incentive  of  Trade. — Why  Men  engage 
in  Foreign  Commerce. — Use  of  Bills  of  Exchange. — How  England 
Trades. — What  Wealth  is. — Would  it  not  be  an  Advantage  to  have 
Money  similar  to  the  Nations  with  whom  our  Trade  is  chiefly  con- 
ducted } — What  effect  would  Unlimited  Coinage  of  Silver  Produce  .-* 
— Silver  Bullion  will  Never  be  Easily  Obtained. — The  End  which 
Laws  should  Seek. — The  Par  Value  Delusion. — Effect  of  Limited 
Coinage. — Artificial  Value  of  Coins. — Hard  Pan. — Gold  Premium. — 
True  Test  of  Value. — How  Evils  can  be  Averted. — Social  Problems 
will  always  be  before  Mankind. — What  Inflation  can  do. — Confed- 
erate Money. — A  Cotton  Basis  for  Money. — Why  Goods  are  not 
Sold  when  active  Inflation  is  Progressing — Study  of  Social  Topics. 
— Conclusion. 

"  The  simple  believetJi  every  zuord :  but  the  prudent  man 
looketJi  well  to  J  lis  going!' 

We  have  heretofore  found  that  the  ultimate  object  and 
end  of  our  governmental  policy  should  be  to  establish  jus- 
tice and  promote  the  prosperity  and  development  of  the 
American  people.  To  that  purpose  every  means  should 
be  made  subordinate,  and  we  should  carefully  deliberate 
before  believing  the  statements  of  classes  whose  clamors  in 
behalf  of  their  o\vn  interests  burden  the  air. 

We  have  also  found  that  stability  of  the  average  rate  of 
prices  is  one  of  the  most  powerful  influences  which  can  be 
devised  to  secure  the  aforesaid  end.  Furthermore,  we  have 
found  that,  as  the  general  scale  of  prices  is  merely  a  reflec- 
tion of  the  value  of  the  currency,  stability  of  prices  is  pos- 
sible only  to  the  extent  that  uniformity  of  value  is  main- 
tained by  the  money  in  which  those  prices  are  stated.  It 
follows  that  the  answer  to  the  aforesaid  question  resolves 

473 


474 


SOCIAL  STRUGGLES. 


itself  into  this :    Would  such  a  measure  create  stability  of 
prices  ? 

A  large  number  of  persons  constantly  proclaim  that  if 
we  establish  unlimited  coinage  of  both  gold  and  silver,  that 
instead  of  the  silver  and  gold  dollars  being  on  an  equality 
of  value,  the  gold  dollar  will  be  at  a  premium  and  be  dearer 
than  at  present.  They  furthermore  tell  us  that  such  an 
inequality  would  produce  greater  fluctuations  in  prices  than 
now  exist  and  be  very  disastrous  to  the  national  prosperity. 
The  chief  argument  in  support  of  their  doctrines  is  that  as 
gold  has  a  fixed  value  and  is  the  standard  of  coinage  in  the 
nations  with  whom  the  bulk  of  our  foreign  commerce  is 
conducted  ;  to  wit,  with  , England,  France,  Holland,  and 
Germany,  it  is  necessary  for  us  to  have  a  similar  currency  on 
an  equality  of  value  with  those  nations.  Let  us  now  see  if 
the  aforesaid  statements  be  correct. 

FOLLY   OF   BLINDLY   IMITATING   OTHER  NATIONS. 

In  the  opinion  of  many  intelligent  observers,  the  peace 
of  Europe  is  akin  to  the  peace  of  a  man  with  a  keg  of  gun- 
powder and  a  lot  of  shavings  stored  in  the  cellar  of  his 
house.  At  any  time,  a  general  war  or  widely  spread  revo- 
lutionary movements  may  occur.  Suppose,  as  a  result  of 
such  events,  the  money  of  European  nations  should  become 
worth  only  one-half  what  it  now  is.  If  the  commerce  of 
this  country  require  that  our  money  should  conform  to 
the  European  standard,  in  such  case  it  would  logically  and 
inevitably  follow  that  we  should  at  once  change  our  cur- 
rency to  an  equality  with  that  of  the  nations  with  whom 
we  trade.  But  the  same  persons  who  gravely  assure  us  we 
cannot  advantageously  trade  with  Holland  unless  our  mer- 
chants employ  the  same  kind  of  money  in  use  in  that  coun- 
try would  protest  against  such  a  step.  On  the  other  hand, 
it  would  also  follow  that  if  European  nations  adopted  meas- 
ures to  double  the  present  value  of  their  money,  we  should 
properly  do  the  same  thing  with  ours  and  make  the  term 
"  one  dollar "  mean  as  much  value  as  the  term  ''  two  dol- 
IsPrs  "  now  does. 


IMITATION  OF  EUROPE. 


47S 


Adoption  of  the  foregoing  principles  would  be  an  entire 
abandonment  of  the  idea  of  maintaining  a  stable  currency 
and  stable  prices  in  this  country.  In  its  stead,  we  should 
act  on  the  notion  that  every  fluctuation  in  the  value  of 
European  money  and  consequently  every  change  in  Euro- 
pean prices  should  be  reproduced  in  the  United  States  by 
appropriate  legislation. 

WHAT   WE   HAVE  ACTUALLY   DONE. 

Absurd  as  the  aforesaid  proposition  is,  in  fact,  it  is  pre- 
cisely what  we  have  been  doing  since  1873.  European 
nations  changed  the  meaning  of  the  words  "pound," 
"franc,"  "mark,"  etc.,  by  striking  silver  out  of  the  statute 
books  as  a  legal  tender  and  denying  it  free  coinage.  This 
proceeding  has  resulted  in  an  appreciation  of  the  value  of 
gold  to  the  extent  of  over  20  per  cent.  Prices  have  fallen 
in  the  same  ratio  and  Europe  has  suffered  all  the  evils  of  a 
contracting  currency.  Money  has  risen  in  value  while  all 
other  property  has  relatively  fallen.  Instead  of  seeking  to 
maintain  uniformity  in  the  value  of  their  money  and  stabil- 
ity in  prices,  those  nations  have  steadily  legislated  to  create 
dearer  money  and  cheaper  goods  and  labor.  Universal 
distress  has  thus  been  produced  among  the  industrial  classes 
while  the  holders  of  over  twenty  thousand  million  dollars' 
worth  of  national  bonds  ■  have  been  correspondingly  en- 
riched. Practically  the  public  debts  have  thus  been  silently 
increased  to  the  enormous  amount  of  four  thousand  mill- 
ions of  dollars,  without  including  the  addition  to  private 
indebtedness  and  the  increase  in  the  value  of  railroad 
bonds. 

In  1873,  silver  was  slyly  demonetized  in  the  United 
States.  The  foregoing  tables  of  prices  show  conclusively 
that  the  great  change  which  has  occurred  in  the  meaning 
of  the  term  "one  dollar"  would  not  have  taken  place  if, 
without  reference  to  the  conduct  of  other  nations,  we  had 
steadily  adhered  to  the  principle  of  maintaining  a  stable 
currency  and  stable  prices  in  the  United  States.  Instead 
of  that,  we  have  been  deluded  with  the  notion,  industri- 


476 


SOCIAL  STRUGGLES. 


ously  disseminated  by  persons  who  would  make  a  profit 
from  its  adoption,  that  because  Europe  had  so  legislated  as 
to  change  the  value  of  money  and  the  scale  of  prices,  there- 
fore, great  disasters  would  befall  us  if  we  did  not  follow  in 
her  footsteps.  Without  examination  we  have  believed 
these  false  cries.  The  tables  aforesaid  show  that  if  we  had 
not  demonetized  silver,  prices  in  the  United  States,  since 
1873,  would  have  remained  nearly  on  the  level  of  prices  in 
gold  at  that  time.  This  would  have  prevented  an  enor- 
mous amount  of  wrong  and  suffering  in  this  country,  and 
in  consequence  of  the  steadier  employment  of  labor,  and 
greater  creation  of  wealth,  the  United  States  would  be  far 
richer  than  at  present.  But  a  few  persons  would  not  have 
been  as  rich  as  they  now  are. 

WHAT   WE   SHOULD   NOW   DO. 

Shall  we  now  continue  to  maintain  our  money  at  the 
artificial  height  to  which  it  has  been  raised  by  demonetizing 
silver?  Or,  shall  we  return  to  the  sound  principle  that  sta- 
bility in  the  value  of  United  States  money  should  be 
sought  for,  without  the  slightest  reference  to  the  fluctua- 
tions in  the  value  of  the  money  of  foreign  nations?  The 
latter  course  would  not  derange  our  foreign  commerce  in 
the  slightest  degree.  Having  money  different  from  that  of 
England  would  have  no  more  effect  upon  our  trade  with 
England  than  if  she  adopted  silver  and  we  retained  gold. 
If  England  doubled  the  value  of  a  pound  sterling,  or 
made  it  one  half  what  it  now  is,  such  a  proceeding  would 
not  in  the  least  disable  us  from  trading  with  England. 

HOW   FOREIGN   COMMERCE   IS   CONDUCTED. 

Commerce  between  nations  is  carried  on  by  an  exchange 
of  commodities.  Money  is  not  used  in  such  trade.  There  is 
no  such  thing  as  international  money.  To  a  comparatively 
small  extent,  gold  and  silver  are  used  to  pay  balances  in 
such  transactions  but  they  are  used  as  commodities  and  not 
as  money.  If  a  New  York  merchant  owe  a  merchant  in 
London  ten  thousand  dollars  he  always  sends  him  directly, 


HO IV  FOREIGN  MERCHANTS  TRADE. 


477 


or  indirectly,  some  commodity  in  payment.  This  maybe 
a  certain  number  of  bales  of  cotton,  a  certain  number  of 
bushels  of  corn,  or  a  certain  number  of  ounces  of  gold  bul- 
lion. Whether  payment  be  made  in  quicksilver,  copper,  lead 
or  gold,  the  principle  of  the  transaction  is  precisely  the 
samCo  Payment  is  made  by  a  commodity.  The  price  of 
this  commodity  is  computed  in  the  kind  of  money  stated  in 
the  agreement.  But  this  is  only  a  matter  of  a  little  arith- 
metic and  does  not,  of  itself,  affect  the  actual  cost  of  the 
commodity  to  either  party.  When  greenbacks  were  quoted 
at  a  discount  of  50  per  cent.,  it  made  no  difference  to  the 
New  York  merchant,  in  settling  his  accounts  with  a  London 
merchant,  whether  the  wheat  shipped  to  Liverpool  were 
computed  at  its  price  in  greenbacks,  or  its  price  in  gold. 
It  was  essentially  a  question  of  a  little  computation.  If  all 
nations  in  the  world  adopted  the  American  silver  dollar  as 
the  basis  of  computing  values,  the  only  practical  difference 
resulting  therefrom  would  be  a  little  saving  of  time  in  com- 
putation. 

From  1797,  for  upwards  of  twenty  years,  England  sus- 
pended specie  payments.  But  this  made  no  difference  in 
the  mode  in  which  her  merchants  paid  for  foreign  goods. 
It  was  done  with  commodities  before  suspension,  and  after 
suspension  the  payment  went  on  as  before.  When  specie 
payments  were  suspended  in  this  country  in  1861,  that 
event  did  not  arrest  our  foreign  commerce  for  a  day  ;  simply 
because  foreign  payments  are  made,  not  in  money,  but  in 
commodities. 

If  the  merchants  of  this  country  could  not  trade  with 
foreign  nations  unless  provided  with  the  same  kind  of 
money  as  those  nations,  our  mints  would  be  asked  to  coin 
the  money  of  every  country  with  whom  we  hold  commerce. 
A  person  trading  with  Russia  would  need  "  roubles  " ;  he 
would  need  ''  marks  "  to  trade  with  Germany  ;  "  francs  "  to 
trade  with  France,  etc.,  etc.  But,  in  fact,  merchants  do  not 
need  anything  of  the  kind.  Silver  dollars  are  the  Mexican 
money.  But  it  does  not  therefore  follow  that  in  order  to 
trade  with  Mexico  merchants  must  provide  themselves  with 


478 


SOCIAL  STRUGGLES. 


silver  dollars.  The  essential  thing  in  foreign  trade  is  that 
something  should  be  sent  abroad  which  foreigners  prefer  to 
what  they  already  have  and  which  they  are  ready  to  give  in 
exchange  for  what  has  been  sent  them. 

Foreign  commerce  is  not  conducted  for  amusement. 
Neither  is  it  carried  on  from  benevolent  or  philanthropic 
motives.  Foreign  commerce  originates,  whenever  a  man 
thinks  he  can  make  a  profit  by  buying  a  commodity  in  one 
place,  changing  its  value  by  carrying  it  to  another  place, 
and  there  exchanging  it  for  some  commodity  the  value  of 
which  can  be  increased  by  bringing  it,  on  the  return  jour- 
ney, to  the  place  from  which  the  first  bought  commodity 
was  taken.  The  result  of  this  transaction  is  that  he  has 
been  the  middle-man  through  whose  help  parties  in  one 
country  have  bartered  goods  with  persons  in  another  coun- 
try. 

FOREIGN  TRADE  IS  A  BARTER   OF   ONE   THING   FOR 

ANOTHER. 

Let  us  sketch  the  steps  by  which  farmers  in  Illinois 
trade  with  farmers  in  Brazil  and  barter  wheat  for  coffee. 
The  Illinois  farmers  sell  their  wheat  for  the  dollars  current 
in  the  United  States.  This  wheat  is  taken  to  a  mill  and 
after  being  ground  is  shipped  to  New  York,  in  which 
market  it  is  sold,  as  so  many  barrels  of  flour,  to  a  merchant 
who  carries  on  commerce  with  Brazil.  This  merchant  pays 
for  it  with  the  dollars  current  in  the  United  States.  The 
flour  is  then  shipped  to  Rio  Janeiro  and  there  sold  for  the 
money  current  in  Rio  Janeiro.  With  the  proceeds  from 
the  sale  of  the  flour,  a  cargo  of  coffee  is  bought  and  paid 
for  in  the  same  money  received  for  the  flour. 

Or,  as  is  frequently  the  case,  when  the  ship'arrives  in  the 
harbor  of  Rio  Janeiro,  the  person  in  charge  of  the  cargo 
goes  to  a  dealer  in  coffee  and  says :  "  I  wish  to  buy  a  cargo 
of  cofTee.  How  much  is  coffee  worth?"  After  learning 
that  fact,  the  next  question  is  :  "  What  will  you  allow  me 
per  barrel  for  my  flour  and  give  me  pay  in  coffee  at  so  much 
per  hundred  pounds?"     If  a  bargain  be  made,  the  parties 


PROFITS  OF  MIDDLEMEN.  . -g 

thereto  compute  the  value  of  the  flour  and  coffee  and  ascer- 
tain how  much  coffee  shall  be  given  in  exchange  for  the 
flour.  The  coffee  is  then  brought  to  New  York  and  sold 
for  dollars  current  in  the  United  States  to  a  wholesale 
dealer  in  coffee.  This  dealer  sells  directly,  or  indirectly,  to 
a  retail  dealer  of  coffee  in  Illinois.  He  sells  it  to  the  same 
farmers  who  sold  the  wheat,  (the  flour  from  which  was 
traded  for  the  coffee,)  and  takes  his  pay  in  the  same  dollars 
paid  for  the  wheat.  In  Brazil  the  flour  is  passed  from  hand 
to  hand  until  it  reaches  the  farmers  who  consume  it  and 
pay  for  it  with  coffee. 

The  barter  has  then  been  completed.  The  farmers  of  Illi- 
nois have  exchanged  their  grain  with  the  farmers  of  Brazil. 
The  result  is  similar  to  what  would  have  occurred  if  a 
farmer  in  Illinois  could  have  walked  across  the  road  to  a 
telephone  ofifice  and  said  to  a  farmer  in  Brazil  :  "  How- 
much  coffee  will  you  give  me  for  a  bushel  of  wheat?  "  The 
onl}^  difference  is  that  the  wheat  grower  and  the  coffee 
planter  have  both  had  to  pay  a  profit  to  several  middlemen, 
in  addition  to  the  charges  for  freight.  The  result  of  this 
expense  is  that  the  man  who  consumes  the  flour  gives  a 
great  deal  more  coffee  for  it  than  is  received  by  the  man 
who  raised  the  wheat.  And  the  man  who  consumes  the 
coffee  gives  more  wheat  for  it  than  is  received  by  the  coffee 
planters. 

What  becomes  of  the  surplus -wheat  not  received  or  con- 
sumed by  the  coffee  planter,  and  the  surplus  coffee  not 
received  by  the  wheat  raiser?  The  answer  is  obvious. 
Part  of  it  has  been  expended  in  paying  the  actual  cost  of 
transportation  ;  the  balance  of  those  commodities  has  been 
taken,  by  the  merchants  who  carried  on  this  barter,  as 
profits.  To  get  possession  of  this  surplus,  or  balance  of  com- 
modities, is  the  object  of  those  ivho  comhict  foreign  commerce 
and  tJi£  purpose  for  wliicJi  they  engage  in  it. 

THE  •INCENTIVE   OF   TRADE. 

In  the  foregoing  example,  it  is  apparent  that  the  princi- 
pals  of    the   trade    are   the   wheat    grower  and    the    coffee 


48o 


SOCIAL  STRUGGLES. 


planter.  It  is  also  evident  that  the  incentive  to  the  ex- 
change of  commodities  is  the  antecedent  fact  that  A  has  a 
surplus  of  the  thing  which  B  lacks  and  is  ready  and  willing 
to  exchange  therefor  an  article  desired  by  A,  It  further 
appears  that  a  difference  between  the  kind  of  money  used 
in  Illinois  and  that  used  in  Brazil  has  not  in  the  least  hin- 
dered the  trade.  Why  is  this  ?  Simply  because  the 
Illinois  man  made  the  barter,  not  for  the  purpose  of  getting 
money,  but  for  the  purpose  of  getting  coffee.  The  Brazilian 
made  the  barter,  not  for  the  purpose  of  getting  the  money 
of  the  Illinoisian,  but  for  the  purpose  of  getting  his  wheat 
in  form  of  flour.  The  motives  of  the  trade  explain  why 
it  has  been  conducted  as  it  has. 

WHY    MEN   ENGAGE   IN   FOREIGN   COMMERCE. 

We  have  seen  that  the  principals  engaged  in  bartering 
wheat  and  coffee  care  nothing  whatever  about  having  a 
similarity  between  the  money  of  Illinois  and  the  money  of 
Brazil.  Let  us  now  see  whether  the  agents  and  subordi- 
nates in  this  barter  care  any  more  about  such  similarity 
than  their  principals  do.  The  ultimate  reason  which  in- 
duces the  New  York  merchant  to  become  a  party  to  the 
aforesaid  barter,  is  a  desire  to  increase  his  wealth.  The 
form  of  said  wealth  is  entirely  subordinate  to  the  essential 
end  and  purpose  ;  to  wit,  its  increase.  He  does  not  par- 
ticularly care  whether  he  becomes  possessed  of  Brazil- 
ian money,  or  any  other  money,  or  special  thing,  what- 
soever. The  sole  question  before  him  is  this  :  After  this 
transaction  be  completed,  will  I  have  more  wealth  than 
at  present  ?  All  other  facts  and  considerations  are  second- 
ary, and  no  consequence  whatever,  except  in  so  far  as  they 
may,  or  may  not,  tend  to  produce  the  final  result  desired. 
When  considering  the  enterprise,  he  has  before  him  the 
price  of  flour  in  New  York  stated  in  United  States  money; 
the  price  of  flour  in  Rio  Janeiro  stated^in  Brazilian  money; 
the  price  of  coffee  in  Rio  Janeiro  stated  in  Brazilian  money; 
the  price  of  coffee  in  New  York  stated  in  United  States 
money ;  and  the  expenses  of  conducting  the  business.     It 


HOW  PA  YMENTS  ARE  MADE. 


481 


is  a  simple  problem  in  arithmetic.  If  the  solution  of  this 
problem  show  the  probability  of  his  owning  enough  more 
United  States  dollars,  or  more  dollars'  worth,  after  the 
transaction  be  completed  than  before,  to  warrant  the  labor 
and  risk,  he  embarks  in  it.     Otherwise,  he  does  not. 

Whether  Brazil  has  or  has  not  the  same  kind  of  money 
as  the  United  States,  does  not  influence  him  in  the  least. 
He  only  wishes  to  know  whether  a  profit  can  be  made  out 
of  the  trade.  Neither  would  he  be  influenced  in  the  slight- 
est by  knowledge  that  the  money  of  Brazil  was  superior  to 
the  money  of  the  United  States.  He  would  care  no  more 
for  that  than  for  the  fact  that  the  climate  of  Rio  Janeiro,  in 
some  respects,  is  superior  to  that  of  New  York. 

USE   OF   BILLS   OF   EXCHANGE. 

In  the  aforesaid  example,  we  have  assumed  that  the 
value  of  the  coffee  given  in  exchange  for  the  flour,  was 
equal  to  that  of  the  flour.  Let  us  now  see  what  occurs 
when  the  value  of  the  coffee  exceeds  that  of  the  flour.  In 
such  case,  the  balance  due  the  Brazilian  merchant  would  be 
first  computed  in  the  money  of  Rio  Janeiro.  This  balance 
might  then  be  paid  in  various  ways ;  but  the  principle  of 
payment  would  always  be  the  same  ;  to  wit,  payment  would 
be  made  in  a  commodity.  The  agent  in  charge  of  the  ship's 
cargo  might  pay  this  balance  by  having  brought  with  him 
in  the  ship  some  bales  of  dry  goods,  some  boxes  of  hard- 
ware, some  agricultural  implements,  or  some  bars  of  silver 
or  gold  bullion.  By  some  of  these  things,  as  commodities, 
the  balance  might  be  paid  directly  or  indirectly,  in  Rio 
Janeiro.  Or  the  ship's  agent  might  say  :  "  My  principal 
has  shipped  a  valuable  commodity  to  Liverpool ;  to  wit,  a 
large  number  of  bales  of  cotton.  In  payment  for  that  cot- 
ton there  is  due  him  another  valuable  commodity ,  to  wit, 
so  many  ounces  of  gold  or  silver  bullion.  I  have  brought 
with  me  certain  documents  which  are  evidence  of  those 
facts.  Now,  I  will  give  you  an  order  directing  the  debtors 
of  my  principal  to  deliver  as  much  of  this  commodity  to 
you  as  is  necessary  to  pay  the  balance  due  you." 
31 


482 


SOCIAL  STRUGGLES. 


Thus  the  BraziHan  merchant  is  placed  in  ownership  of  a 
commodity  in  London  and  the  balance  is  thereby  canceled 
between  him  and  the  New  York  merchant.  The  Brazilian 
merchant  then  directly,  or  indirectly,  says  to  a  coffee  planter: 
"  My  stock  of  coffee  is  reduced.  I  wish  to  buy  your  crop. 
You  owe  a  debt  in  London  for  dry  goods.  I  own  a  valuable 
commodity  in  London.  I  will  transfer  to  you  the  owner- 
ship of  this  commodity  in  payment  for  your  coffee.  You 
can  then  transfer  this  commodity  to  your  creditors  in  Lon- 
don and  you  will  then  have  paid  your  debt  and  I  will  own 
your  coffee." 

The  above  named  transfers  of  the  ownership  of  commod- 
ities are  made  by  what  are  called  bills  of  exchange  and 
drafts.  These  are  nothing  more  nor  less  than  a  convenient 
means  of  exchanging  one  commodity  for  another  and  pay- 
ing a  balance  due  one  man,  as  a  result  of  such  exchange,  by 
giving  him  some  other  commodity. 

HOW   ENGLAND   TRADES. 

England  trades  with  every  nation  on  the  globe.  Gold 
sovereigns  are  the  peculiar  money  of  England.  But,  when 
English  merchants  send  out  their  ships  on  trading  voyages 
they  do  not  load  them  with  sovereigns.  They  load  their 
ships  with  commodities  and  send  them  to  places  where 
those  commodities  can  be  traded  for  other  commodities,  at 
such  a  ratio  of  exchange,  as  will  insure  a  profit  when  the  re- 
turn cargo  is  sold  in  England,  or  such  other  place  as  it  may 
be  carried.  For  example,  England  ships  hardware  and  dry 
goods  to  Russia  and  takes  hemp  in  exchange.  The  fact 
that  the  money  of  England  is  different  from  the  money  of 
Russia  does  not  prevent  such  exchanges.  The  trade  occurs 
because  a  man  in  Russia  has  a  surplus  of  hemp  and  lacks 
hardware  and  cloth.  At  the  same  time,  a  man  in  England 
has  a  surplus  of  hardware  and  cloth  and  wants  hemp.  The 
men  who  carry  on  this  barter  are  called  foreign  merchants, 
and  they  do  so  because  they  get  a  profitable  fraction  of  the 
goods  traded  for  doing  the  business.     This  fraction  they 


RICH,   WITHOUT  MONEY.  483 

get  directly,  or  indirectly,  as  the  case  may  be ;  but  they  al- 
ways get  it,  or  cease  to  carry  on  the  trade. 

WHAT   WEALTH    IS. 

A  man  is  not  necessarily  poor  because  he  have  no  money. 
Wealth  depends  on  the  ownership  of  valuable  things  and 
on  the  capacity  and  means  of  creating  other  valuable 
things.  For  instance,  here  is  a  man  who  owns  a  thousand 
acres  of  fertile  land.  It  is  situated  in  a  salubrious  region, 
convenient  to  markets,  and  is  under  a  high  state  of  cultiva- 
tion. On  it  stands  a  substantial  farm-house  well  supplied 
with  furniture  and  every  needed  convenience.  The  barns 
and  out-houses  are  commodious.  The  farm  is  stocked  with 
the  best  breeds  of  horses  and  cattle  and  amply  supplied 
with  all  kinds  of  agricultural  implements  and  machines. 
The  granaries  are  overflowing  with  grain.  The  dairy  house 
is  piled  full  of  cheese  and  butter.  Large  amounts  of  hay  lie 
untouched  and  stocks  of  grain  are  unthreshed.  The  farmer 
owns  all  these  things  free  of  debt,  but  he  has  only  five  dol- 
lars in  money.  Would  any  one  be  foolish  enough  to  think 
such  a  man  poor?  He  is  rich  because  he  owns  a  large 
amount  of  valuable  commodities  and  is  constantly  creating 
more.  These  he  can  exchange  for  other  commodities  and 
supply  his  wants  at  will. 

What  is  true  of  an  individual  is  equally  true  of  a  nation. 
Its  wealth  does  not  consist  simply  of  money,  but  of  valuable 
commodities  and  the  power  to  create  others.  A  nation 
with  abundance  of  valuable  surplus  commodities  need  en- 
tertain no  fears  of  being  unable  to  barter  them  with  other 
nations  for  other  commodities.  Whether  her  money  be  the 
same  as  that  of  other  nations,  or  not,  is  immaterial.  The 
essential  thing  is  that  she  shall  be  able  to  give  in  exchange 
valuable  products  needed  by  other  nations.  And  the  kind 
of  her  money,  in  itself,  has  no  influence  on  her  foreign  com- 
merce. Money  of  stable  and  uniform  value  is  necessary  to 
promote  equitable  dealings  between  her  own  citizens  and 
enable  them  to  easily  hold  industrial  and  commercial  asso- 
ciation with  each  other.     The  money  of  Russia,  Turkey,  or 


484 


SOCIAL  STRUGGLES. 


Germany  does  not  concern  the  people  of  the  United  States 
any  more  than  the  school  system  of  those  nations,  or  any 
other  feature  or  department  of  their  domestic  government. 
We  should  attend  strictly  to  our  own  business  and  not 
meddle  with  that  of  other  nations.  American  statesmen 
should  see  that  American  citizens  possess  a  stable  currency 
— no  matter  what  currency  other  nations  may  have. 

WOULD  IT  NOT  BE  AN  ADVANTAGE  TO  HAVE  MONEY  SIMI- 
LAR TO  THE  NATIONS  WITH  WHOM  OUR  TRADE  IS 
CHIEFLY  CONDUCTED  ? 

That  depends  on  circumstances.  If  those  nations  main- 
tained a  stable  currency,  it  would  be  a  trifling  advantage  to 
us  to  have  a  currency  precisely  like  it.  If  their  currency 
were  unstable,  it  would  be  a  disadvantage  to  us  to  conform 
ours  to  it.  It  is  of  great  advantage  to  the  United  States  to 
establish  a  stable  currency  for  use  in  our  own  country  ;  but 
whether  this  currency  be  similar  to  that  of  Russia,  Germany, 
or  any  other  nation,  is  of  comparatively  little  importance. 
It  is  a  minor  detail  which  should  always  be  subordinated  to 
the  vital  and  essential  thing,  uniformity  of  value. 

It  would  be  some  commercial  convenience  if  the  Rus- 
sians, Germans,  French,  Spanish,  Portuguese,  Italians,  and 
Turks  would  all  abolish  their  own,  and  use  the  English 
language.  But  there  is  not  the  slightest  probability  at 
present  of  their  doing  so.  If  they  did,  the  only  commer- 
cial advantage  we  should  derive  from  it  would  be  a  saving 
of  the  existing  necessity  of  translating  those  different  lan- 
guages into  ours.  But  this  is  not  a  serious  impediment  to 
interchange  of  ideas.  Considerable  numbers  of  persons  are 
familiar  with  more  than  one  language  and  readily  translate 
one  into  another.  After  that  is  done,  the  printing  press 
becomes  a  universal  interpreter  and  translator. 

So  long  as  a  diversity  of  national  language  exists,  every 
merchant  engaged  in  foreign  commerce  must  directly  or 
indirectly  use  the  services  of  an  interpreter  and  translator. 
The  person  who  does  this  work  at  the  same  time  translates 
foreign  money  into  domestic  money.     If  Germany  adopted 


SCARCITY  OF  SIL  VER. 


485 


the  English  language  and  used  the  same  kind  of  metallic 
money  as  ours,  a  translation  of  German  money  into  United 
States  money  would  still  be  necessary  unless  we  could  per- 
suade the  Germans  to  discard  the  use  of  "  marks  "  and  sub- 
stitute "dollaus"  therefor.  The  far  distant  future  may 
witness  a  change  of  this  kind, — but  it  is  idle  to  specu- 
late upon  it.  Even  if  such  a  change  were  accomplished 
its  chief  advantage  would  be  the  saving  of  a  little  arith- 
metic. As  all  commercial  transactions  must  in  any  con- 
ceivable case  be  computed,  such  an  economy  would  be 
comparatively  trifling.  Every  foreign  merchant  has  printed 
tables,  which  enable  him  at  a  single  glance  to  translate 
one  kind  of  money  into  another.  Whether  this  money 
be  made  of  gold  or  silver  makes  no  difference  in  the  princi- 
ple on  which  this  translation  is  made. 

WHAT   EFFECT    WOULD    UNLIMITED    COINAGE    OF    SILVER 

PRODUCE? 

What  the  relative  value  of  gold  and  silver  will  be  in  the 
future  no  one  can  accurately  predict,  simply  because  no 
one  knows  what  conditions  those  metals  will  hereafter  be 
under.  Our  positive  knowledge  in  that  respect  is  bounded 
by  the  fact  that  the  circumstances  and  conditions  relating 
to  them  then,  as  now,  will  determine  both  their  value  rela- 
tive to  each  other  and  toward  all  other  things. 

The  unlimited  coinage  of  silver  would  increase  the  num- 
ber of  dollars  in  circulation.  The  value  of  each  one  of 
those  dollars  would  not  be  less  than  the  value  of  the  silver 
bullion  contained  in  one  of  them.  We  have  heretofore 
shown  that  this  bullion  has  now  a  greater  value  than  it  had 
in  1872,  but  this  is  less  than  the  present  value  of  one  of 
our  coined  dollars.  Under  unlimited  silver  coinage  the 
value  of  each  one  of  our  dollars  would  closely  approximate 
the  value  of  the  gold  dollar  in  1872,  The  prices  of  com- 
modities, the  rate  of  wages  and  the  price  of  real  estate 
would  consequently  rise  to  about  the  level  they  stood  in 
1872,  stated  in  gold.  The  men  now  unable  to  sell  their 
goods  and  lands,  and  consequently  overwhelmed  with  debt, 


486 


SOCIAL  STRUGGLES. 


would  be  relieved  from  the  condition  created  by  the  de- 
monetization of  silver  and  the  consequent  arbitrary  changes 
in  the  relative  value  of  dollars  and  commodities.  This 
would  revive  business,  diminish  the  number  of  idle  persons 
and  the  amount  of  idle  machinery  and  thus  increase  our 
daily  production  of  wealth.  It  would  strengthen  the  ten- 
dency for  this  country  to  become  by  far  the  richest  nation  in 
the  world.  This  would  necessitate  the  use  of  an  additional 
amount  of  money. 

Whether  we  should  then  use  nothing  as  metallic  money 
but  silver  coins,  no  one  can  predict  with  absolute  certainty. 
Under  present  conditions  it  is  extremely  probable  that  still 
less  gold  than  at  present  would  be  in  circulation. 

SILVER   BULLION   WILL   NEVER   BE   EASILY   OBTAINED. 

But  we  must  remember  that  the  demand  for  silver  rela- 
tive to  the  supply,  both  for  use  in  the  arts  and  for  money, 
is  steadily  increasing,  as  fully  shown  heretofore  by  tables 
of  average  relative  prices.  This  fact  has  been  obscured  by 
the  more  conspicuous  advance  in  the  value  of  gold,  but  its 
existence  is  nevertheless  certain.  A  great  commercial 
development  is  progressing  in  Asia,  Africa  and  South 
America,  all  silver-using  continents.  Their  population  is 
so  numerous,  and  their  present  stock  of  silver  so  relatively 
small,  that  the  addition  of  twenty-five  cents  per  head  to 
the  silver  in  use  among  them  would  immediately  change 
the  present  relative  value  of  silver  and  gold  in  a  marked 
degree.  An  active  demand  for  silver  for  the  Asiatic  trade 
may  spring  up  at  any  time.  Whenever  a  change  of  this 
kind  is  seen  to  be  inevitable,  the  probabilities  are  that  the 
mints  of  the  Latin  Union  will  be  opened  for  silver  coinage 
more  freely  than  at  present.  Such  a  succession  of  steps 
may  soon  occur,  and  as  our  ratio  of  coinage  is  sixteen 
pounds  of  silver  to  one  of  gold,  while  that  of  Europe  is 
fifteen  and  a  half  of  silver  to  one  of  gold,  it  would  not  have 
to  proceed  very  far  before  the  bullion  value  of  a  United 
States  silver  dollar  would  approximate  the  value  of  a  gold 
dollar  sufficiently  to  prevent  gold  exportation.     Moreover, 


THE  TRUE  END  OF  LA  W. 


487 


the  considerations  heretofore  set  forth  show  that  the  mate- 
rials from  which  pur  money  shall  be  made  is  of  very  little 
importance.  Stability  of  the  amount  of  money  is  the  vital 
thing. 

It  should  also  be  borne  in  mind  that  the  large  amount 
of  gold  which  the  United  States  have  drawn  from  Europe 
during  the  last  ten  years  has  powerfully  tended  to  widen 
the  difference  between  the  relative  value  of  gold  and  silver 
on  that  continent.  Whenever  any  considerable  portion  of 
the  gold  now  held  in  this  country  is  returned  to  Europe,  a 
result  will  be  produced  precisely  the  opposite  of  that  caused 
by  diminishing  the  amount  of  gold  -there  held.  Every 
million  dollars'  worth  of  gold  shipped  to  Europe  tends  to 
lower  the  value  of  gold  in  Europe  and  correspondingly 
enhance  the  relative  value  of  silver. 

But  there  are  other  far  more  important  considerations 
than  the  foregoing.  So  long  as  we  use  gold  as  money,  in 
order  to  retain  gold  in  this  country  we  must  increase  the 
wealth  of  this  country.  In  the  words  of  Adam  Smith  : 
"  Gold  and  silver,  like  other  commodities,  naturally  seek 
the  market  where  the  best  price  is  paid  for  them,  and  the 
best  price  is  commonly  given  for  everything  in  the  country 
which  can  best  afford  it."  In  order  to  increase  our  wealth 
we  must  keep  the  labor  and  machinery  of  the  country  fully 
at  work,  and  this  can  best  be  done  by  abandoning  the  idea 
of  enacting  special  legislation  to  retain  gold  in  this  country, 
and  instead  of  that  absurdity  adopting  a  policy  better  fitted 
to  promote  equity  between  all  classes  of  persons. 

THE   END    WHICH    LAWS   SHOULD    SEEK. 

The  ultimate  object  of  our  Government  should  be  to 
advance  the  material  prosperity,  the  happiness  and  the 
intellectual  and  moral  development  of  all  those  within  its 
jurisdiction.  So  long  as  these  purposes  are  fulfilled,  it  is  of 
little  consequence  whether  a  large  or  a  small  amount  of 
gold  remain  in.  this  country.  If  gold  leave  us,  as  it  may, 
it  will  only  be  because  we  can  more  profitably  sell  than 
keep  it.     Its  owners  will  not  give  it  away. 


488 


SOCIAL  STRUGGLES. 


A  considerable  portion  of  Adam  Smith's  "  Wealth  of 
Nations"  is  devoted  to  showing  the  fallacy  of  legislation 
enacted  on  the  theory  that  the  wealth  of  a  nation  is  deter- 
mined by  the  amount  of  the  precious  metals  within  its 
borders  ;  and  that  therefore  measures  should  be  adopted 
to  prevent  their  exportation.  Adam  Smith's  arguments 
on  that  matter  have  never  been  refuted.  They  apply  with 
the  same  force  to  our  present  situation  as  they  did  to  Eng- 
land in  1775. 

What  would  be  thought  of  the  wisdom  of  a  merchant 
who  owed  $50,000,  drawing  interest,  and  kept  $50,000 
locked  up  in  his  safe?  If  it  would  be  wisdom  for  an  indi- 
vidual to  use  his  idle  money  to  pay  interest-bearing  debts, 
it  is  wisdom  for  a  nation  to  pursue  the  same  policy.  By 
so  doing  the  national  wealth  would  not  be  diminished. 
On  the  contrary,  its  condition  would  be  improved,  and  a 
drain  for  interest  account  stopped. 

Under  a  correct  monetary  system  there  would  be  no 
more  reason  for  being  alarmed  because  five  millions  of  gold 
were  shipped  from  this  country  in  a  week  than  for  alarm 
because  five  million  dollars'  worth  of  some  other  commod- 
ity were  exported  in  a  week. 

A  rich  merchant,  unaware  of  the  greater  wealth  of  Girard, 
is  reported  to  have  petulantly  said  to  him,  "■  I  can  buy  you, 
and  sell  you."  To  which  Girard  calmly  replied,  "  That  is 
true.     But  I  can  buy  thee  and  keep  thee." 

An  increase  of  capital,  a  greater  diversity  and  a  greater 
power  of  annual  production,  more  fixed  wealth,  more  con- 
tented and  intelligent  laborers,  and  freedom  from  foreign 
indebtedness  will  enable  the  American  people  not  only  to 
buy  gold  whenever  they  have  use  for  it,  but  also  give  them 
power  to  keep  it  when  they  wish  to  do  so. 

THE   PAR   VALUE   DELUSION. 

With  unlimited  coinage,  free  from  any  charge  beyond  its 
actual  cost,  gold  and  silver  may  properly  be  called  commod- 
ity money.  That  is,  the  normal  value  of  a  silver  coin  is 
the  value  of  the  silver  bullion  contained  therein,  plus  the 


EFFECT  OF  NUMBERS. 


489 


cost  of  coinage.  And  in  like  manner  the  normal  value  of  a 
gold  coin  is  the  value  of  the  gold  bullion  contained  therein, 
plus  the  cost  of  coinage.  But  it  must  be  steadily  borne  in 
mind,  that  this  is  oily  the  case  under  unrestricted  coinage  of 
both  metals. 

Whenever  any  legislative  interference  be  interposed  to 
the  free  coinage  of  both  gold  and  silver,  the  nature  of 
money  made  of  those  metals  is  radically  changed.  It 
ceases  to  be  a  commodity  money  and  at  once  partakes  of 
the  nature  of  paper  money.  Its  commodity  character  is 
more  or  less  merged  into  a  numerical  value.  We  have 
heretofore  found  that  the  value  of  a  coin  depends  on  the 
number  of  those  coins  in  circulation.  Under  free  coinage 
of  both  gold  and  silver,  the  number  of  gold  and  silver  coins 
depends  chiefly  upon  the  amount  of  gold  and  silver  bullion 
in  existence.  The  amount  of  material  from  which  those 
coins  can  be  made  is  thus  the  dominant  fact  which  fixes 
the  value  of  one  of  those  coins.  Legislation  cannot  in- 
crease the  amount  of  bullion,  and  so  long  as  the  weight  and 
fineness  of  coins  are  unchanged,  their  value  depends  to  a 
considerable  extent  on  the  amount  of  bullion  in  human 
possession. 

EFFECT  OF  LIMITED   COINAGE. 

But  the  moment  legislation  by  any  means  whatsoever 
determines  the  number  of  legal-tender  coins,  their  number 
is  then  determined  by  law,  and  not  by  the  automatic  in- 
cr-ease  or  decrease  in  the  amount  of  the  commodities  from 
which  they  can  be  made.  This  is  so  simply  because  the 
number  of  coins  is  no  longer  influenced  by  the  amount  of 
bullion ;  that  dominant  fact  under  free  coinage,  is  elimi- 
nated and  in  place  of  it  is  substituted  the  legislative  enact- 
ment which  determines  the  number  of  ^coins  regardless  of 
the  amount  of  bullion. 

We  have  heretofore  discussed  the  fact  that  the  value  of 
one  commodity,  of  two  things  which  are  used  for  a  similar 
purpose,  can  be  affected  without  increasing  or  diminishing 
its  amount.     Any  fact  which   changes  the  amount  of  the 


4QO  SOCIAL  STRUGGLES. 

Other  commodity  has  substantially  the  same  effect  as  a 
direct  interference  with  the  use  and  amount  of  the  first 
named  commodity. 

It  therefore  follows  that  in  order  to  change  the  commod- 
ity value  of  a  silver  coin  it  is  not  necessary  to  directly  inter- 
fere with  the  coinage  of  silver.  An  interference  with  the 
free  coinage  of  gold  would  produce  the  same  result.  Fur- 
thermore, it  follows  that  a  change  in  the  commodity  value 
of  a  gold  coin  can  be  produced  without  interfering  with  the 
free  coinage  of  gold.  An  interference  with  the  coinage  of 
silver  will  produce  the  same  result. 

No  matter  which  metal  is  denied  free  coinage,  while  the 
other  is  unrestrictedly  coined,  the  bullion,  or  commodity, 
value  of  the  metal  which  is  coined  will  always  equal  the 
value  of  one  of  the  coins  made  therefrom,  less  the  cost  of 
coinage.  But  the  value  of  one  of  the  coins  made  from  the 
metal  denied  free  coinage  will  be  greater  than  its  commod- 
ity value.  A  new  condition  has  entered  to  affect  its  value ; 
viz.,  legislative  restriction  on  the  number  of  those  coins. 
To  the  effect  of  the  number  of  such  coins,  due  to  natural 
limitations  of  their  material,  is  added  the  legislative  restric- 
tion on  the  amount  of  this  material  which  shall  be  con- 
verted into  coins.  If  this  legislative  restriction  be  rigid 
enough,  coins  made  from  a  metal  with  less  commodity 
value  than  the  metal  freely  coined,  will  have  the  same  value 
as  the  coins  whose  commodity  value  and  coined  value  differ 
only  by  the  cost  of  coinage.  Thus,  at  the  present  time 
gold  is  unrestrictedly  coined  while  the  coinage  of  silver  is 
restricted.  The  result  is  seen  in  an  increased  value  of'  gold 
bullion,  and  a  consequent  increase  of  the  value  of  the  coins 
made  therefrom.  The  silver  coins  have  the  same  value  as 
the  gold  coins  because  restricted  in  number.  In  other 
words,  both  the  gold  coins  and  the  silver  coins  are  at  a  pre- 
mium above  their  normal  value  ;  viz.,  their  commodity  value 
under  free  coinage  of  both  metals.  For  it  must  be  steadily 
remembered  that  the  value  of  one  of  all  the  coins  in  use 
depends  upon  the  total  number  of  such  coins.  As  a  result 
of  this  principle,  an  increase  of  the  number  of  silver  coins 


DIMINISHED  NUMBER,  INCREASED  VALUE.  401 

has  precisely  the  same  influence  on  the  value  of  each  and 
every  one  of  the  gold  coins,  that  would  be  exerted  if  by 
some  chemical  process,  silver  could  be  transmuted  into  gold. 
In  either  case  the  practical  result  would  be  the  same,  /.  e., 
an  increase  in  the  total  number  of  legal-tender  coins  and  a 
corresponding  decrease  in  the  value  of  each  one  of  them. 

ARTIFICIAL   VALUE   OF   COINS. 

The  .artificial  price,  the  premium  above  their  normal 
value,  which  a  gold  dollar  and  a  silver  dollar  now  command 
is  shown  by  the  average  scale  of  prices  being  lower  by  rea- 
son of  restricted  coinage.  This  premium  on  legal-tender 
coins  above  their  natural  value  under  free  coinage  could  be 
increased  to  ten  times  what  it  now  is  ;  or,  in  fact,  to  almost 
any  conceivable  extent.  All  that  would  be  requisite  to 
produce  this  result  would  be  to  still  further  restrict  the 
coinage.  Silver  coinage  and  the  use  of  silver  already 
coined  could  be  abolished.  After  that  another  step  might 
be  taken  in  the  same  direction.  The  coinage  of  gold  could 
be  placed  under  such  restrictions  that  the  value  of  a  gold 
coin  would  be  many  times  greater  than  the  value  of  the 
bullion  contained  therein.  The  difference  between  a  gold 
coin  and  its  materials. could  be  made  as  great  as  the  differ- 
ence between  the  value  of  a  one-dollar  greenback  and  the 
value  of  the  paper  rags  from  which  that  greenback  is  made. 
Sufficient  limitation  of  the  number  of  gold  dollars  would 
make  the  term  ''one  gold  dollar"  mean  as  much  value 
as  the  term  "  twenty  gold  dollars "  now  does.  In  fact, 
the  value  of  "  one  gold  dollar"  would  depend  only  on 
the  practical  extent  to  which  a  restriction  of  the  number  of 
those  dollars  and  the  number  of  other  fellow  legal-tender 
dollars,  could  be  carried. 

HARD  .PAN. 

If  the  reader  will  carefully  ponder  the  foregoing  consid- 
erations he  will  recognize  the  fallacy  of  the  popular  ideas 
in  regard  to  what  is  called  "  hard  pan."  That  is,  the  no- 
tion that  by  using  a  gold   currency,  a   scale   of  prices   is 


492 


SOCIAL  STRUGGLES. 


reached  which  it  is  impossible  shall  become  any  lower,  and 
therefore  are  "  hard-pan  prices."  When  we  consider  that 
prices  always  reflect  the  value  of  the  units  in  which  they 
are  stated  ;  and  that  the  value  of  one  of  these  units  de- 
pends on  the  total  number  of  those  units,  we  see  that  varia- 
tions in  prices  depend  on  variations  in  the  number  of  mone- 
tary units.  Finally,  we  see  that  the  only  "  hard  pan  "  limit,  to 
which  prices  may  be  depressed,  is  the  practical  extent  to  wJiicJi 
the  mass  of  mankind  ivill  alloiv  those,  tvho  con  Id  make  a  profit 
by  restricting  the  number  of  monetary  units,  to  actually  do  so. 
Under  unrestricted  coinage  and  free  circulation  of  both 
gold  and  silver  coins,  there  is  a  natural  limit  below  which 
prices  will  not  usually  fall.  That  is  determined  by  the 
total  number  of  coins  in  circulation,  which  fact  is  largely 
governed,  under  such  conditions,  by  the  amount  of  bullion 
in  human  possession.  But  whenever  a  limitation  be  made 
of  the  number  of  coins  in  use,  the  only  limit  to  a  fall  in 
prices  is  the  extent  to  which  the  use  of  coins  is  restricted. 
And  it  practically  makes  little  difference  how  this  limitation 
of  the  number  of  coins  is  produced.  It  may  be  by  the  de- 
monetization of  silver ;  by  the  demonetization  of  gold,  by 
locking  up  the  coins,  or  by  a  variety  of  other  methods. 
The  essential  thing  to  lower  prices  being  a  contraction  of 
the  number  of  monetary  units  in  circulation. 

GOLD   PREMIUM. 

TMany  persons  imagine  that  unrestricted  coinage  of  silver 
would /^Wz/rr  a  premium  on  gold  dollars  and  make  them 
dearer  than  at  present.  The  simple  fact  is  that  a  premium 
on  a  gold  dollar  already  exists.  Its  value  has  been  enhanced 
by  legislative  restrictions  on  silver  coinage.  This  premium 
is  now  obscured  from  the  view  of  ordinary  observers  by  the 
fact  that  limitation  of  silver  dollars  has  given  them  a  pre- 
mium also.  But  unrestricted  coinage  of  silver  would  re- 
move the  "  par  value  "  delusion  and  make  the  actual  fact 
apparent  to  all. 

Instead  of  making  gold  dearer,  as  is  commonly  supposed, 
such  a  measure  would  cheapen  the  gold  dollar.     Superfi- 


HOW  TO  ASCERTAIN  VALUE.  403, 

cially  it  might  appear  higher  but  in  reality  it  would  be 
lower.  For  example,  in  the  month  of  December,  1872,  the 
gold  dollar  was  at  a  premium  of  13  per  cent,  over  the  green- 
back. When  this  premium  disappeared  many  supposed 
gold  had  been  "cheapened  by  resumption."  In  fact,  that 
view  of  it  was  stated  in  thousands  of  newspapers.  Although 
gold  is  now  at  par  with  greenbacks  it  is  really  much  dearer 
than  in  1872. 

TRUE   TEST  OF  VALUE. 

The' only  accurate  test  of  the  value  of  a  dollar  is  this: 
How  much  labor  or  how  much  of  the  products  of  labor 
must  be  given  in  exchange  for  it  ?  What  must  be  paid  to 
get  it  ?  Whoever  doubts  that  gold  is  dearer  now  than  in 
December,  1872,  is  invited  to  compute  how  much  labor,  or 
how  much  of  one  of  its  products,  was  required  to  get  a  hun- 
dred gold  dollars  then,  and  how  much  is  now  required. 

The  aforesaid  considerations  show  that  the  unrestricted 
coinage  of  silver  by  the  United  States  would  inevitably 
lower  the  present  value  of  a  gold  dollar.  How  much  it 
would  lower  it  no  one  can  compute  with  accuracy,  because 
there  are  several  conditions  involved  not  definitely  known. 
If  one  hundred  millions  of  the  gold  now  locked  up  in  this 
country  were  displaced  by  silver  and  shipped  to  Europe, 
the  effect  on  the  value  of  the  gold  in  Europe  would  be  the 
same  as  if  we  had  shipped  one  hundred  millions  of  silver  to 
Europe  and  on  the  voyage  it  had,  by  a  chemical  process, 
been  converted  into  'gold.  In  fact,  there  would  then  be 
one  hundred  millions  more  gold  in  Europe  and  the  value  of 
each  ounce  of  gold  would  be  correspondingly  lowered.  A 
general  rise  in  European  prices  would  be  the  result.  The 
present  disparity  between  the  value  of  gold  bullion  and  sil- 
ver bullion  would  be  diminished.  The  gold  dollar  might  be 
nominally  five,  or  ten  per  cent,  above  the  value  of  the  silver 
dollar,  but  in  reality  it  would  be  much  cheaper  than  now. 
Less  labor  would  be  required  to  obtain  one  gold  dollar. 


AQA  SOCIAL  STRUGGLES. 


HOW   EVILS   CAN   BE  AVERTED. 

In  view  of  the  readiness  with  which  prices  can  be  de- 
pressed, by  contraction  of  the  currency  to  a  point  so  low 
that  every  person  in  debt  twenty-five  per  cent,  of  liis  total 
assets  would  thereby  be  made  bankrupt  and  penniless,  the 
question  naturally  arises  :  What  security  have  the  masses  of 
the  people  that  the  few  persons  who  would  profit  by  such  a 
contraction  will  not  at  any  time  influence  legislation  and 
produce  it  ?  The  answer  is  the  same  that  applies  to  the 
question  of  protection  from  all  kinds  of  aggression  and 
wrong;  to  wit,  the  intelligence,  vigilance,  and  courage  of 
the  people.     "  Eternal  vigilance  is  the  price  of  liberty." 

The  wrongs  and  sufferings  which  have  recently  been 
inflicted  on  the  masses  of  Europe  and  this  country,  were 
possible  because  the  people  have  hitherto  neglected  to 
study  economic  principles  and  consequently  were  easily 
misled.  Especially  is  this  true  of  the  United  States, 
where  every  man  by  his  ballot  has  a  share  in  the  Gov- 
ernment. Besides  failing  to  observe  the  grave  defects 
in  our  financial  laws  and  modes  of  taxation,  the  majority 
have  not  seen  that  the  existence  of  a  large  proportion  of 
monopolies  is  chiefly  due  to  the  present  system  of  granting 
patents  and  franchises.  Ignorance  and  carelessness  on  the 
part  of  the  many  have  enabled  a  few  cunning  and  unscrupu- 
lous persons  to  plunder  millions  of  people  so  silently  and 
imperceptibly,  that  they  did  not  recognize  the  hands  which 
committed  the  theft. 

SOCIAL   PROBLEMS   WILL   ALWAYS   BE   BEFORE    MANKIND. 

So  far  as  we  can  learn  from  history,  the  average  man  of 
the  year  1885  has  the  same  disposition  to  take  advantage  of 
his  fellow  mortals,  that  the  average  man  had  in  the  year  85. 
Those  who  fancy  that  our  laws  will  soon  be  such  that  fur- 
ther watchfulness  to  prevent  spoliation  by  class  legislation 
will  be  unnecessary,  ignore  all  the  lessons  of  the  past.  The 
social  and  financial  problems  now  under  public  debate  are 
not  before  us  for  a  day,  or  a  year,  but  for  all  time.     They 


UNCHANGING  PRINCIPLES.  *  ^gc 

can  only  be  solved  by  reference  to  eternal  principles ;  and 
knowledge  and  practical  application  of  those  principles 
will  always  be  requisite  to  secure  the  highest  welfare  of 
mankind.  A  class,  comparatively  small  in  numbers,  but 
powerful  by  reason  of  wealth  and  compact  organization, 
will  always  be  on  the  alert  to  take  covert  advantage  of  the 
majority,  and  under  cover  of  law  and  some  hypocritical  pre- 
tense, adapted  to  the  occasion,  quietly  appropriate  the 
labor  and  goods  of  those  who  neglect  a  constant  and  intelli- 
gent defense  of  their  own  interests. 

The  inference  from  the  aforesaid  facts  is  obvious.  Our 
Government  derives  its  authority  from  the  will  of  the  vot- 
ers. Unless  the  majority  of  voters  are  intelligent  enough 
to  recognize  the  measures  adverse  to  their  interests,  a  cun- 
ning minority  will  mislead  them  into  voting  for  laws  which 
will  enrich  the  few  at  the  expense  of  the  many.  The  only 
safeguard  against  such  an  ever  present  danger  is  a  widely 
spread  knowledge  of  the  true  principles  of  Political  Economy 
and  Finance. 

WHAT   INFLATION   CAN   DO. 

Every  fact  and  principle  heretofore  stated  concerning  the 
effects  and  evils  of  diminishing  the  amount  of  money  and 
lowering  the  general  scale  of  prices,  when  such  amount  of 
money  has  been  conformed  to  by  all  the  business  of  the 
country,  are  equally  true,  whenever  the  case  be  reversed  and 
a  great  increase  made  in  the  amount  of  money.  Such 
money,  no  matter  what  guarantees  of  its  payment  may 
exist,  no  matter  how  imperatively  all  persons  are  required 
to  receive  it  at  its  face  value  ;  no  matter  how  much  wealth 
may  be  pledged  for  its  ''redemption,"  will  certainly  depre- 
ciate. The  fatal  defect  of  an  excessive  number  of  monetary 
units  admits  of  no  remedy  short  of  a  diminution  of  those 
excessive  numbers. 

CONFEDERATE   MONEY. 

During  the  recent  "  unpleasantness  "  between  the  North- 
ern and  Southern  States,  I  witnessed  a  striking  example  of 


496 


SOCIAL  STRUGGLES. 


the  truth  of  the  foregoing  statements  and  of  the  facility 
with  which  men  can  not  only  mislead  others  but  also  deceive 
themselves.  The  fortunes  of  battle  left  me  in  a  hotel 
whose  landlord  was  so  anxious  to  protect  his  guests  from 
burglars  and  other  harm  that  he  guarded  their  residence 
night  and  day  with  armed  men.  The  Richmond  papers 
Were  daily  brought  us  by  newsboys  in  quest  of  our  money. 
Prices  throughout  the  Confederacy  had  then  largely  risen 
as  an  inevitable  sequence  of  the  issue  of  an  immense  num- 
ber of  Confederate  dollars.  But  these  papers  used  a  kind 
of  reasoning  in  regard  to  this  fact  similar  to  that  used  by 
New  York  papers  in  1885,  in  regard  to  contraction.  That 
is,  almost  every  conceivable  cause  for  the  admitted  change 
of  prices  was  alleged,  but  the  actual  one.  Not  one  of 
them  appeared  to  think  a  change  in  the  total  amount  of 
money  in  circulation  had  anything  to  do  with  the  change 
which  had  occurred  in  the  value  of  money;  and  that  the 
scale  of  prices  expressed  the  altered  value  of  the  mon- 
etary unit.  They  gravely  stated  that  prices  were  high 
because  of  under  production;  the  blockade;  the  diffi- 
culty of  shipping  goods  from  one  place  to  another  because 
the  armies  used  the  railroads  ;  want  of  labor  because  so 
many  men  were  in  the  army  ;  the  waste  of  war ;  fears  that 
the  negro  laborers  would  get  beyond  the  lines  protected 
by  Confederate  troops,  etc.,  etc. 

A   COTTON   BASIS   FOR   MONEY. 

These  editorials  informed  their  readers  that  the  Confed- 
erate Government  could  safely  continue  to  issue  hundreds 
of  millions  of  dollars.  The  reason  assigned  was  that,  unlike 
any  other  similar  emission  of  paper  money  which  had  ever 
taken  place  in  the  history  of  mankind,  Confederate  money 
zvas  based  on  cotton,  and  cotton  was  a  recognized  form  of 
wealth  in  every  quarter  of  the  globe.  They  argued  that  no 
matter  how  much  money  the  Confederacy  might  issue,  so 
long  as  each  dollar  had  behind  it  a  dollar's  worth  of  cotton, 
either  in  actual  existence,  or  that  could  readily  be  produced, 
such  money  would  not  depreciate.     Prices  would  be  tempo- 


REPE  TITION  OF  HIS  TOR  V.  ^gy 

rarily  high  by  reason  of  other  causes,  but  the  amount  of 
such  money  could  not  cause  a  rise  of  prices. 

Then  computations  were  made  to  show  how  easily  the 
Confederacy,  after  obtaining  its  independence  (which  was  a 
certain  event),  could  raise  whatever  amount  of  cotton  that 
might  be  needed  to  "redeem"  every  dollar  based  on  cotton. 
The  necessity  of  cotton  to  all  mankind  was  dwelt  on  with 
great  minuteness.  The  idea  of  questioning  the  absolute 
truth  of  the  aforesaid  propositions  was  deemed  too  absurd 
to  merit  serious  refutation.  The  treatment  of  those  who 
ventured  to  even  doubt  the  aforesaid  doctrines,  was  addi- 
tional evidence  that  there  are  two  kinds  of  very  disagreeable 
people ;  to  wit,  those  who  tell  unpleasant  lies,  and  those 
Avho  tell  unpleasant  truths. 

The  ugly  fact  that  the  prices  of  commodities,  stated  in 
this  vaunted  money,  continued  to  rise  was  sedulously  as- 
cribed to  causes  other  than  the  real  one.  In  fact,  their 
arguments  in  substance  were  the  arguments,  reversed^  which 
all  readers  of  papers  in  favor  of  making  gold  the  sole  legal 
tender  have  recently  seen.  "  The  amount  of  money  had 
nothing  to  do  with  the  alteration  in  prices."  This  last 
statement  was  deemed  proven  by  an  allegation  similar  to 
that  employed  to  show  that  falling  prices  cannot  be  due  to 
exclusive  use  of  gold  ;  viz.,  "  Because  the  money  was  so 
good,  it  could  not  possibly  create  a  change  of  prices." 

We  all  know  the  final  result  of  this  cotton  experiment. 
The  money  steadily  sank  in  value  with  each  million  put  in 
circulation  until  the  amount  of  it  became  so  enormous  that 
each  dollar  was  worth  less  than  one  cent,  and  then  no  one 
wanted  it  at  that  rate.  From  the  beginning  of  this  experi- 
ment to  the  end,  precisely  the  same  fact  appeared  which  has 
always  been  developed  in  every  historical  inflation  of  the 
currency,  viz.:  the  change  in  prices  faithfully  recorded  both 
the  change  in  the  amount  of  the  money  and  the  conse- 
quent alteration  of  its  value.* 

*  The  following  is  a  copy  of  a  voucher  for  hospital  supplies  made 
three  days  before  the  fall  of  Richmond,  the  original  being  the  property 
32 


498 


SOCIAL  STRUGGLES. 


WHY     GOODS    ARE    NOT    SOLD    WHEN    ACTIVE     INFLATION 
IS   PROGRESSING. 

Another  striking  fact  was  developed  ;  and  as  the  altera- 
tion in  the  amount  of  the  currency  was  precisely  the  op- 
posite of  contraction,  this  fact  was  precisely  the  opposite 

of  C.  G.  G.  Merrill,  of  this  city.     The  prices  named  were,  of  course, 

Confederate  money : 

General  Hospital  No.  9. 

1865.  To  Wm.  T.  Feutress,  Steward. 

March  22d,  3  chickens $90.00 

"         "      Herbs 10.00 

"         "      Onions  for  hash 10.00 

"       23d,  I  peck  sweet  potatoes 33-oo 

"        "3  doz.  eggs  at  $20 60.00 

"         "      Pickle 10.00 

•'      24th,  I  door  mat 1 2.00 

"        "      3  large  shad 90.00 

"         "      2  large  fowls 90.00 

"         "       I  bushel  turnips 35-oo 

"        "      I  peck  sweet  potatoes 35-oo 

"      27th,  Ashes  for  soap 10.00 

"        "      I  bushel  turnips 30.00 

"        "      Herbs  for  soup 5.00 

"      28th,  Herbs  and  onions ib.oo 

"      29th,  Marketing,  herbs,  &c 8.00 

"        "      Repairing  wagon , 6.00 

"      30th,  Onions 10.00 

"        "      I  bunch  herbs i  .00 


;.oo 

Received  at  Richmond  this  31st  day  of  March,  1865,  of  John  J.  Gra- 
vatt.  Surgeon  P.  A.  C.  S.,  the  sum  of  five  hundred  and  sixty-five  dollars 
in  full  of  the  above  amount. 

William  T.  Feutress, 

Hospital  Steward. 
I  certify  that  the  articles  purchased  as  above  are  necessary ;  are  for 
the  exclusive  use  of  the  sick  and  wounded  soldiers,  C.  S.  A.,  in  General 
Hospital  No.  9,  and  will  be  applied  to  their  subsistence  and  comfort 
alone,  and  that  the  articles  could  not  be  purchased  at  a  lower  rate.  The 
property  in  this  voucher  will  be  borne  on  my  return  for  the  half  year 

ending  June  30th,  1865. 

Surgeon  in  Charge. 


I 


WHEN  GOODS  ARE  HOARDED.  ^gg 

of  the  phenomenon  produced  by  contraction.  In  times  of 
contraction  prices  are  falling,  and  every  one  is  anxious  to 
sell  his  goods  and  keep  his  money.  But  in  the  Confederacy 
inflation  was  in  progress,  and,  as  an  inevitable  result,  every 
one  wanted  to  keep  his  goods  and  sell  his  money.  The  rea- 
son was  obvious.  Money  was  diminishing  in  value  very 
rapidly.  Goods  were  rising  in  price  so  fast  that  when  a 
merchant  had  sold  at  retail  he  could  not  replace  at  whole- 
sale prices.  He  was  worth  less  than  if  he  had  closed  his 
store  when  it  was  full  of  goods.  If  a  man  could  buy  a 
stock  of  goods  on  six  months'  credit,  a  handsome  profit 
was  certain.  Before  the  six  months  had  passed  the  price 
of  half  the  goods  would  pay  the  note  for  the  price  of  all 
of  them,  thus  leaving  the  other  half  of  the  goods  as  profits, 
provided  their  owner  kept  them  in  form  of  goods. 

In  short,  commerce  was  diseased.  The  malady  and  the 
symptoms  thereof  were  exactly  the  opposite  of  the  busi- 
ness derangement  which  has  recently  gorged  New  York 
and  other  financial  centers  with  idle  money,  while  on  every 
side  great  numbers  of  persons  became  bankrupt  through 
inability  to  exchange  their  goods  for  money.  In  New 
York  money  has  been  rising  in  value  and  its  owners  have 
thereby  been  prevented  from  buying  goods.  They  have 
been  waiting  for  still  lower  prices  of  goods  and  higher  value 
of  money.  In  Richmond  goods  were  rising  in  value  and 
their  owners  were  disinclined  to  sell  them  because  the 
money  in  which  payment  would  be  made  was  falling  in 
value. 

If  the  Confederacy  had  obtained  its  independence,  only 
one  course  would  have  sufficed  to  restore  prices  and  the 
value  of  their  money  to  the  rate  prevailing  at  the  com- 
mencement of  the  war.  That  course  would  have  essentially 
consisted  of  levying,  in  some  form,  a  tremendous  tax  on 
the  whole  people  to  be  paid  in  depreciated  money,  and  the 
destruction  of  this  money  as  soon  as  paid  into  the  public 
treasury.  If  this  had  been  accomplished  to  the  requisite 
extent,  the  value  of  the  remaining  money  would  have  been 
raised.     But  it  is  extremely  unlikely  that  any  other  course 


coo  SOCIAL  STRUGGLES. 

would  have  been  adopted  but  that  which  has  followed  such 
enormous  issues  of  money, — repudiation  of  all  of  it. 

HOW   TO   PREVENT   INFLATION. 

There  is  only  one  safeguard  against  the  evils  of  infla- 
tion. That  is  the  same  and  the  only  thmg  which  can  pro- 
tect us  against  contraction,  to  wit,  public  intelligence 
regarding  the  principles  of  finance.  No  people  will  ever 
allow  themselves  to  be  misled  and  deeply  suffer  the  evils 
of  either  a  contraction  or  an  inflation  of  their  money,  who 
fully  understand  one  simple  fact,  viz.:  The  average  scale  of 
prices  is  ahvays  a  correct  indication  both  of  the  amount  and 
the  value  of  the  money  in  zvJiicJi  those  prices  are  stated. 

Whenever  the  principle  illustrated  by  this  fact  is  gener- 
ally comprehended,  the  people  will  perceive  what  is  going 
on,  whenever  a  change  occurs  in  the  rate  of  prices  on  which 
business  and  contracts  have  been  adjusted  and  formed. 
They  will  then  at  once  instruct  their  servants  that  the 
national  financial  policy  is  faulty. 

STUDY   OF   SOCIAL  TOPICS. 

The  quotation  from  the  Century  magazine  in  the  preface 
of  this  volume  is  a  fair  illustration  of  the  state  of  mind  in 
which  a  multitude  of  well  meaning,  intelligent  persons  are 
in  regard  to  some  social  questions.  They  see  that  there  is 
something  wrong,  else  the  present  conditions  would  not 
exist  ;  but  where  the  fault  lies,  or  what  it  consists  of,  they 
fail  to  recognize. 

This  perplexity  does  not  arise  from  inability  to  reason 
properly  ;  but  from  assuming  certain  fundamental  premises 
to  be  true  which  in  fact  are  false.  Thus,  the  editor  afore- 
said reasons  admirably  from  premises  he  has  not  examined. 
He  says,  "  Money  is  plenty  and  prices  low."  His  whole 
statement  of  the  case  rests  on  the  supposition  that  low 
prices  and  a  large  amount  of  hoarded  money  are  evidence 
that  "  money  is  plenty." 

The  causes  which  led  an  intelligent  and  conscientious 
gentleman  to  commit  this  error  have  heretofore  been   re- 


NEED  OF  HUMILITY.  cqi 

cited.  The  matter  is  here  alluded  to  simply  because  it  is 
one  of  many  kindred  mistakes  constantly  being  made  from 
a  precisely  similar  reason,  viz.,  Neglect  to  thorougJily  test  a 
foundation  before  beginning  to  build  upon  it. 

ISjo  one  can  co^npute  how  many  bricks  will  be  required 
to  build  a  given  wall  unless  he  first  ascertain  the  number 
of  bricks  in  one  cubic  foot  of  that  wall.  The  same  thine 
is  true  of  every  other  problem  whatsoever,  no  matter  to 
what  subject  it  relates.  The  bottom  facts — the  fundamen- 
tal principles  must  be  accurately  learned  before  a  single 
safe  step  toward  a  solution  of  the  question  can  be  taken. 

The  study  of  finance  and  other  economic  subjects  is  gov- 
erned by  the  same  rules  as  the  investigation  of  all  other 
matters.  Inquirers  should  assume  themselves  completely 
ignorant  of  knowledge  they  wish  to  acquire,  and  lay  aside  all 
prejudice  and  superstition.  Students  must  "  become  as  lit- 
tle children  "  and  begin  at  the  bottom  of  whatever  they 
wish  to  thoroughly  understand.  All  accurate  learning  is 
otherwise  impossible. 

A  man  should  not  hesitate  to  accept  a  demonstrated  fact 
and  ask :  Is  this  in  accord  with  what  I  have  heretofore  be- 
lieved, and  is  it  as  safe  ?  That  has  properly  nothing  what- 
ever to  do  with  the  examination.  The  sole  question  with 
which  every  proposition  should  be  challenged  ought  to 
be  :   Is  this  true? 

Furthermore,  a  person  should  not  allow  himself  to  get 
befogged  by  anxiety  in  regard  to  the  effect  which  knowl- 
edge of  a  new  fact  or  principle  will  have  upon  society.  He 
should  have  confidence  enough  in  the  Creator  of  all  Truth 
to  prevent  fear  of  the  consequence  either  of  its  discovery 
or  dissemination.  Otherwise,  he  is  guilty  of  the  presumpt- 
uous folly  of  imagining  himself  and  fellows  wiser  and  more 
conservative  than  the  Infinite. 

Whoever  correctly  understands  financial  principles  is 
not,  like  others,  bewildered  by  every  change  in  the  mon- 
etary situation.  A  person  ignorant  of  the  fuTidamental 
principles  of  arithmetic  may  be  shown  how  to  mechan- 
ically  solve    one    arithmetical    problem.      But,    if    another 


502 


SOCIAL  STRUGGLES. 


one  be  presented  to  him  which  differs  in  the  least  from  that 
done  without  reference  to  principles,  he  is  utterly  unable  to 
take  a  single  step  toward  its  solution.  In  like  manner,  abil- 
ity to  correctly  interpret  the  various  financial  facts  which 
are  constantly  arising  depends  on  a  cleau  perception  of  the 
principles  involved. 


CONCLUSION. 


Many  other  topics  invite  discussion  but  the  limits  assigned 
for  this  book  have  been  reached.  The  chief  intent  has 
been  to  state  facts  and  correct  principles,  to  stir  the  slimy 
pools  of  superstition,  rather  than  to  present  remedial  meas- 
ures in  detail.  Its  many  defects  and  shortcomings  are  en- 
trusted to  the  kindness  of  a  good-natured  public. 

Even  if  this  work  were  a  perfect  picture  of  the  situation 
of  affairs  to-day,  it  would  be  imperfect  to-morrow.  Condi- 
tions and  circumstances  are  incessantly  changing.  Princi- 
ples alone  remain  fixed.  Moreover,  our  knowledge  of 
principles  and  consequent  ability  to  properly  apply  them 
to  a  given  state  of  facts  are  steadily  changing. 

We  are  not  quite  as  helpless  as  chips  floating  in  the 
middle  of  a  river.  We  have  a  limited  power  to  control  our 
destinies.  But  this  little  can  only  be  done  by  adjusting 
ourselves  to  the  new  conditions  into  which  the  irresistible' 
stream  of  events  on  which  we  glide  is  constantly  bringing  us. 
Suppose  the  captain  of  a  sailing  vessel,  when  starting  from 
New  York  on  a  voyage  to  Liverpool,  should  say :  "  Now,  I 
am  going  to  be  wise  and  conservative.  I  shall  put  my  sails 
and  rudder  just  right  when  I  start,  and  keep  them  un- 
changed until  my  destination  be  reached."  Such  manage- 
ment would  never  bring  a  ship  across  the  ocean.  The  sails 
and  rudder  may  be  right  on  leaving  New  York  but  they  will 
not  remain  so,  unless  steadily  changed  to  meet  the  varying 
conditions  which  the  ship  will  encounter  during  her  passage. 

In  like  manner,  the  Social  Ship  on  which  our  race  is  em- 
barked cannot  now  be  properly  guided  by  the  means  ade- 


CHANGE  NECESSITATES  CHANGE. 


503 


quale  at  the  beginning  of  her  journey.  We  have  floated 
into  different  waters  and  are  menaced  by  different  gales. 
Human  progress  and  invention  have  developed  and  created 
different  conditions  and  each  year  widens  the  difference  be- 
tween the  Present  and  the  Past. 

Justice  is  always  justice.  Equity'is  always  equity.  But 
the  means  best  adapted  to  secure  and  promote  justice  and 
equity  change  with  altered  circumstances.  Let  us  not  then 
embrace  the  narrow  delusion. that  "  conservatism  "  consists 
in  keeping  our  social  sails  and  guiding  machinery  un- 
changed, no  matter  into  what  currents  we  may  drift  nor 
from  what  new  direction  a  storm  may  threaten.  Such  con- 
duct is  at  once  shallow  and  unavailing.  It  is  the  favorite 
device  of  little  persons  posing  as  profound  thinkers  and 
statesmen.  It  will  neither  guide  us  aright  nor  enable  us  to 
evade  consideration  of  the  social  problems  slowly  but  inces- 
santly arising.  Cowardice  is  useless.  Whether  we  wish  to 
or  not,  we  must  bear  and  discharge  the  new  responsibilities 
and  duties  which  every  year  will  surely  bring  us. 

An  unseen  Being  has  placed  us  on  earth  and  appointed 
the  narrow  bounds  we  cannot  pass.  Borne  swiftly  onward 
by  forces  beyond  our  control,  wisdom  bids  us  recognize  the 
inexorable  laws  which  govern  us.  We  cannot  change  them 
if  we  would.  Nothing  is  possible  for  us,  but,  in  an  imperfect 
way,  to  bring  our  conduct  in  harmony  with  them.  And, 
when  these  mighty  forces  bring  new  conditions  and  evolve 
new  facts,  we  must  either  conform  our  institutions  to  them 
or  be  destroyed  while  attempting  a  foolish  resistance. 

Many  persons,  anxious  for  distinction,  and  perhaps  im- 
bued with  a  genuine  love  of  good  works,  regret  that  Provi- 
dence did  not  permit  them  to  take  part  in  some  of  the  great 
reformatory  and  progressive  movements  witnessed  in  the 
past.  Such  persons  should  reflect  that,  although  our  race 
has  compassed  great  achievements,  an  enormous  work  lies 
before  it.  For  aught  we  know,  the  work  undone  is  greater 
than  that  accomplished.  We  are  still  in  ignorance  of  a 
multitude  of  things.  Our  social  machinery  still  needs 
reformation. 


504 


SOCIAL  STRUGGLES. 


In  the  preface  of  a  medical  treatise,  written,at  the  begin- 
ning of  this  ceptury,  these  words  appear:  "The  present 
perfect  state  of  medical  science  renders  it  impossible  to 
hereafter  record  any  further  discoveries.  We  can  only  ar- 
range what  is  already  known." 

As  a  man  who  should  now  practice  the  aforesaid  "  per- 
fect state  "  of  medicine  would  justly  be  lodged  in  jail  for 
manslaughter,  we  smile  at  the  conceit  of  this  simple-minded 
doctor.  But  are  we  not  all,  more  or  less  unconsciously, 
every  day  doing  essentially  what  he  did  ?  Nothing  is 
more  common  and  more  presumptuous  and  shallow  than 
the  assumption  that  Wisdom  is  incarnated  in  the  present 
generation,  and  that  further  progress  is  impossible.  Great 
wrongs  remain  to  be  righted  and  great  dormant  truths  await 
the  touch  of  the  Reformer  capable  of  their  elucidation. 

Therefore,  O  man  of  the  Nineteenth  Century,  be  not  too 
confident  that  your  beliefs  are  correct  and  your  knowledge 
perfect.  As  if  on  a  mountain  of  wisdom,  you  wear  a  com- 
placent smirk  and  look  with  pitying  contempt  on  the  man 
of  the  Fourteenth  Century.  But,  is  it  not  perfectly  cer- 
tain that  the  man  of  the  Twenty-fourth  Century  will  mete 
you  your  own  measure  and  will  wonder  how  you  bore  an 
existence  darkened  with  so  much  superstition  and  igno- 
rance? Your  palpable  deficiencies  and  the  ill  devised  so- 
cial organizations  you  have  constructed  should  teach  you 
Humility.  History  should  inspire  emulation  of  the  peace- 
ful victories  of  your  predecessors.  Trust  in,  and  love  of 
Truth  should  give  you  an  industry  and  patience  in  its  pur- 
suit that  nothing  can  either  weary  or  discourage,  and  make 
it  easy  to  discard  traditional  errors  without  misgiving  or 
fear  of  the  result. 

Steady  !      Forward  ! 


APPENDIX. 


A  REVIEW  OF  THE  FINANCIAL  PORTION  OF  THE  FIRST  MESSAGE  OF 
PRESIDENT  CLEVELAND  AND  THE  ACCOMPANYING  REPORT  OF 
THE    SECRETARY  OF  THE  TREASURY. 

The  foregoing  was  written  prior  to  December  i,  1885.  Since 
that  time,  the  Message  of  President  Cleveland  and  the  Report  of 
his  Secretary  of  the  Treasury  have  been  published.  The  present 
administration  has  taken  the  position  that  its  policy  should  be 
in  accordance  with  the  interests  and  wishes  of  the  great  moneyed 
capitalists,  bondholders  and  bankers.  This  is  evidenced  by  the 
fact  that  all  the  President's  financial  suggestions  are  applauded 
and  approved  by  the  newspapers  which  act  as  the  spokesmen  of 
those  classes. 

These  documents  are  therefore  very  interesting  for  two  reasons. 

First :  They  are  an  authentic  statement  by  the  virtual  attorneys 
of  Wall  Street  of  the  beliefs  and  desires  of  the  money  lending 
and  financial  center  of  this  country. 

Second  :  It  is  perfectly  certain  that  the  vast  moneyed  interest 
which,  to  further  its  own  aggrandizement,  is  intent  on  making 
gold  the  sole  legal  tender,  would  shrink  from  no  expense  requisite 
to  secure  the  best  available  talent  in  the  world  to  aid  in  the  prep- 
aration of  an  argument  in  its  behalf  which,  at  public  expense 
and  with  the  weight  of  official  authority,  would  be  placed  before 
the  whole  American  people  and  largely  before  the  civilized  world. 
Therefore  we  can  reasonably  presume  that  these  documents  con- 
tain as  good  an  argument  in  favor  of  demonetizing  silver  as  can 
be  made. 

What  profound  and  scientific  principles  are  set  forth  in  these 
official  papers  to  prove  that  gold  should  be  made  our  sole  legal 
tender  with  free  and  unlimited  coinage  ?  None  whatever.  The 
arguments  heretofore  shown  to  be  fallacious  are  merely  reiterated. 

What  evidence  is  adduced  to  demonstrate  that  silver  coinage 
is  an  evil?  None  whatever.  The  same  report  which  tells  us 
we  have  215,000,000  silver  dollars  and  that   more  would  inflict 


5o6 


APPENDIX. 


disaster,  informs  us  that  France  has  about  600,000,000  of  sil- 
ver dollars  in  circulation.  The  population  of  France  is  over  ten 
millions  less  than  the  population  of  the  United  States ;  her 
wealth  is  less  than  ours ;  and  her  growth  in  population,  commerce 
and  wealth  is  vastly  inferior  to  that  of  this  country.  Yet  the 
authors  of  these  State  papers  do  not  say  that  France  is  suf- 
fering by  reason  of  too  many  silver  dollars.  But  a  simple  cal- 
culation shows  that,  leaving  our  rapid  growth  of  population  out 
of  the  question,  it  would  require  twenty-one  years  of  silver  coin- 
age, at  the  present  rate,  before  we  have  as  much  silver  in  this 
country  as  circulates  in  France. 

These  documents  say  that  silver  coinage  is  an  evil.  But  to  whom 
is  it  an  evil  ?  Is  it  not  evident  that  the  few  rich  money  lenders 
for  whom  these  documents  speak,  regard  silver  coinage  as  an  evil 
because  it  is  a  hindrance  to  gains  desired  by  them  at  the  expense 
of  the  rest  of  the  community  ? 

Both  of  these  official  addresses  base  and  rest  all  their  argu- 
ments and  statements  on  one  assumption  :  viz.,  that  gold  in  some 
mysterious  way  which,  singularly  enough,  they  do  not  think  it 
wise  to  explain,  has  a  fixed,  an  unchanged  and  an  unchangeable 
value.  It  is  presumed  that  no  matter  how  much  the  demand  for 
gold  may  be  increased,  no  matter  how  much  its  actual  or  relative 
amount  may  be  changed,  it  still  remains  at  a  "  fixed  value."  As 
we  have  heretofore  dissected  this  idea,  and  found  it  a  kindred 
error  to  the  notion  that  the  earth  stands  still  and  the  sun  revolves 
around  it,  further  discussion  of  this  assumption  is  unnecessary. 

Both  the  Message  and  the  Report  are  redolent  of  the  prevalent 
delusion  that  the  common  sense  business  principles  which  we 
apply  to  all  other  things  are  inapplicable  to  financial  affairs.  The 
most  noticeable  thing  about  the  Message  is  the  allegation  that 
silver  coinage  is  the  "  ceaseless  stream  that  threatens  to  overflow 
the  land."  This,  we  are  informed,  will  produce  a  "  severe  con- 
traction of  the  currency,"  and  also  produce  a  disastrous  "  rise  in 
prices."  This  absurd  statement  arises  from  supposing  that  mi- 
raculous and  special  laws  preside  over  money.  The  President 
imagines  that,  unlike  all  other  scales,  the  scales  of  finance  are 
so  wonderfully  and  strangely  constructed  that  a  weight  placed  in 
one  side  will  make  both  sides  go  down  at  once.  The  President 
fancies,  when  the  currency  is  contracted  and  thereby  inevitably 
made  more   in  demand,    scarcer,  and   more   valuable,  that  then 


APPENDIX. 


507 


people  will  give  more  of  this  enhanced  money  for  a  certain  thing 
than  before  money  rose  in  value.  If  this  were  so,  a  stoppage  of 
silver  coinage  would  raise  prices.  But  the  President  tells  us 
that  prices  will  rise  if  silver  coinage  be  not  stopped.  What  a 
confusion  of  ideas  ! 
The  Message  says  : 

"  The  necessity  for  such  an  addition  to  the  silver  currency  of  the  nation 
as  is  compelled  by  the  silver-coinage  act,  is  negatived  by  the  fact  that 
up  to  the  present  time  only  about  fifty  millions  of  the  silver  dollars  so 
coined  have  actually  found  their  way  into  circulation,  leaving  more  than 
one  hundred  and  sixty-five  millions  in  the  possession  of  the  Government, 
the  custody  of  which  has  entailed  a  considerable  expense  for  the  construc- 
tion of  vaults  for  its  deposit.  Against  this  latter  amount  there  are  out- 
standing silver  certificates  amounting  to  about  ninety-three  millions  of 
dollars." 

If  the  fact  of  silver  lying  in  the  Treasury-be  evidence  that  silver 
coinage  should  be  stopped,  then  it  follows  that  gold  lying  idle  in 
the  Treasury  is  evidence  that  gold  coinage  should  be  stopped. 

The  Secretary  of  the  Treasury  says  : 

"The  assets  of  the  Treasury  on  the  1st  of  November,  1885,  excluding 
fractional  coin  and  other  unavailable  items,  were  as  follows  ; 

Gold  coin  and  bullion $251,359,349.29 

Less  certificates  outstanding 109,020,760.00 

$142,338,589.29 

Silver  coin  and  bullion $167,657,878.45 

Less  certificates  outstanding 93,146,772.00 

$74,511,106.45." 

Thus  it  appears  that  the  amount  of  idle  gold  dollars  is  largely 
in  excess  of  the  idle  silver  dollars,  and,  if  the  President's  reason- 
ing be  correct,  gold  coinage  is  unnecessary. 

The  Message  says  : 

"  A  special  effort  has  been  made  by  the  Secretary  of  the  Treasury  to 
increase  the  amount  of  our  silver  coin  in  circulation,  but  the  fact  that 
a  large  share  of  the  limited  amount  thus  put  out  has  soon  returned  to 
the  public  Treasury  in  payment  of  duties,  leads  to  the  belief  that  the 
people  do  not  now  desire  to  keep  it  in  hand." 

But,  according  to  the  foregoing  statement  of  the  Secretary,  the 
people  do  not  desire  to  keep  gold  in  hand  ;  and  therefore  gold 
should  no  longer  be  coined.     The   simple  fact  is  that  the  people 


5o8 


APPENDIX. 


generally  prefer  paper  money  to  gold  or  silver ;  but  this  does 
not  prove  that  either  of  those  metals  should  be  demonetized. 

The  Message  tells  us  that  silver  dollars  are  "  depreciated." 
But  the  only  evidence  adduced  in  support  of  such  an  idea  is  the 
fact  that  their  bullion  value  is  less  than  that  of  gold.  The  en- 
hanced value  of  gold  in  consequence  of  an  increased  demand  is 
not  considered  for  a  moment. 

The  Message  next  states  that  European  governments  have  de- 
monetized silver,  and  tliat  "  the  views  of  these  governments  are  in 
each  instance  supported  by  the  weight  of  public  opinion." 

J3ut  what  is  meant  by  "  public  opinion  "  in  European  countries  ? 
Is  it  not  certain  that  those  countries  are  governed  by  the  priv- 
ileged and  the  rich  ;  and  that  the  masses  of  the  people  are  not 
represented? 

The  President  then  sa3's : 

"  The  condition  in  which  our  Treasury  may  be  placed  by  a  persistence 
in  our  present  course,  is  a  matter  of  concern  to  every  patriotic  citizen 
who  does  not  desire  his  Government  to  pay  in  silver  such  of  its  obliga- 
tions as  should  be  paid  in  gold." 

As  none  of  the  Govemment  bonds  contain  an  agreement  to  pay 
them  in  gold,  this  is  assuming  that  every  man  who  wishes  the 
bonds  paid  according  to  their  tenor  is  not  "patriotic."  The  Pres- 
ident evidently  fancies  that  patriotism  requires  the  robbery  of  tax- 
payers in  order  to  pay  bondholders  differently  from  the  agree- 
ment made  when  the  money  was  loaned. 

We  are  next  told  : 

"  We  have  now  on  hand  all  the  silver  dollars  necessary  to  supply  the 
present  needs  of  the  people.  If  the  need  of  more  is  at  any  time  apparent 
their  coinage  may  be  renewed." 

Who  shall  be  the  judge  of  the  amount  of  dollars  needed  by  the 
people  ?  Shall  the  amount  of  metallic  money  be  regulated  by  the 
production  of  mines  and  the  amount  of  metal  in  existence  ;  or, 
shall  it  be  regulated  by  the  caprice  of  the  administration? 

On  this  point,  Prof.  W.  S.  Jevons,  an  economist  of  world-wide 
reputation,  says  :  "  It  might  seem  natural  that  one  most  important 
point  for  discussion  in  an  Essay  on  Money  would  be  the  quantity 
of  money  required  by  a  nation.  Nothing  would  seem  more  desir- 
able than  to  decide  how  much  each  person  needs  of  paper,  gold, 


APPENDIX. 


509 


silver  or  bronze  currency,  so  that  the  Government  might  take  care 
to  provide  sufficient  for  every  one. 

"  No  one  can  tell  how  much  currency  a  nation  requires,  and  to 
attempt  to  regulate  its  quantity  is  the  last  thing  which  a  statesman 
should  do.  We  shall  find  that  to  ascertain  how  much  money  is 
needed  by  a  nation  is  a  problem  involving  many  unknown  quanti- 
ties, so  that  a  sure  solution  can  never  be  obtained." 

Mr.  Cleveland,  however,  appears  to  think  he  could  tell  just 
how  many  silver  dollars  are  needed  in  the  United  States. 

Scores  of  other  authorities  could  be  quoted  to  sustain  the  fore- 
going opinion  of  Prof.  Jevons,  but  I  will  only  cite  the  words  of  one 
other  writer.  "  Gold  and  silver  coins  of  known  weight  and  fine- 
ness are  admirably  fitted  to  perform  the  functions  of  money. 
Costing  labor  and  always  in  demand,  they  have  a  solid  and  per- 
manent value.  Their  purchasing  power  is  not  crippled  when  the 
Government  chooses  to  make  others  like  them.  There  is  no 
motive  on  the  part  of  any  body  or  any  power  to  multiply  the 
national  coins  to  the  extent  of  depreciation.  Inflation,  there- 
fore, with  depreciation  and  its  attendant  evils,  is  impossible.  As 
much  may  be  said  of  contraction.  Should  there  be  temporarily, 
a  short  supply  of  coin,  an  intenser  demand  would  present  sufficient 
inducements  to  augment  the  quantity.  Bullion  would  be  taken  to 
the  mint  for  coinage  and  importations  stimulated.  In  this  man- 
ner, the  evil  would  be  soon  cured.  Thus  is  the  supply  adjusted 
to  the  demand,  and  the  accepted  standard  of  value  preserved  by  a 
mechanism  which  is  self-regulating.  Human  beings,  prompted  by 
the  love  of  gain,  are  instruments  in  a  work  too  nearly  connected 
with  the  great  industrial  concerns  of  a  people  to  be  committed  to 
heads  and  hands  less  intelligent  and  energetic  than  those 
prompted  and  guided  by  self-interest. 

"  The  expression,  '  The  supply  of  money  should  be  equal  to  the 
wants  of  trade,'  is  at  least  intelligible  provided  the  money  referred 
to  be  specie.  It  means  that  the  business  of  a  country  should 
have  its  proportion,  and  no  more,  of  the  circulating  medium  of  the 
world;  that  unnatural  scarcity  should  be  met  by  greater  abun- 
dance, and  superabundance  by  greater  scarcity;  that  the  volume 
should  not  be  changed  arbitrarily  or  capriciously;  that  any  new 
demand  growing  out  of  an  enlarged  industry  should  be  relieved 
by  an  ampler  supply ;  all  for  the  purpose  of  preventing  fluctua- 
tions in  the  standard  of  value,  and  of  holding  prices  at  their  nor- 


5IO 


APPENDIX. 


mal  level.  Every  legitimate  demand  should  be  satisfied,  but  this 
will  be  done  by  virtue  of  the  inevitable  law  which  governs  the 
movement  of  specie — a  movement  which  may  be  embarrassed  but 
cannot  be  helped  by  supervision  or  outside  interference.  Govern- 
ment, in  this  matter,  as  in  some  others,  can  do  nothing  but 
blunder.  Its  whole  duty  is  discharged  and  its  useful  ability  ex- 
hausted when  it  gives  honest  coins  for  all  the  bullion  offered.  It 
might  as  well  attempt  to  control  the  tides  as  superintend  the  ebb- 
ing and  flowing  of  the  precious  metals." 

When  the  foregoing  was  written  it  was  fully  endorsed  by  the 
same  men  who  now  tamper  with  the  coinage  and  seek  to  have  the 
amount  of  metallic  money  controlled  arbitrarily  by  Congress  or  by 
the  Secretary  of  the  Treasury,  Why  has  this  change  of  sentiment 
occurred  ?  Simply  because  they  had  not  then  generally  and  fully 
grasped  the  idea  that  it  was  possible  to  tamper  with  the  coinage 
in  such  way  as  to  increase,  both  the  value  of  money,  and  of  bonds 
and  other  evidences  of .  indebtedness.  They  knew  the  people 
would  not  submit  to  raising  the  weight  of  gold  and  silver  coins,  and 
the  fact  that  the  same  result  could  be  reached  by  demonetizing 
one  of  the  precious  metals  was  not  then,  as  now,  generally  compre- 
hended by  the  bankers  and  creditors.  But  as  soon  as  they  saw 
that  the  coinage  could  be  tampered  with,  in  their  interest,  they 
abandoned  the  doctrine  that  "Government  should  not  interfere 
with  the  amount  of  coinage,"  and  raised  a  hypocritical  wail  that 
"honesty"  required  legislative  interference  with  the  amount  of 
metallic  money. 

In  so  doing  they  abandoned  the  principles  on  which  they  have 
stood  for  generations.  How  long  will  it  be  before  they  regret 
advocacy  of  a  doctrine  so  dangerous  to  themselves  ?  For  it  logi- 
cally and  inevitably  follows,  that  if  the  legislature  have  a  just 
right  to  tamper  with  the  coinage  and  increase  the  value  of  a  dollar, 
it  has  an  equally  good  right  to  diminish  the  value  of  a  dollar. 

The  President  next  informs  us  that  there  "  exists  a  lack  of  con- 
fidence among  the  people." 

We  ask :  Confidence  in  what  ?  Is  it  not  perfectly  certain  that 
no  one  fears  a  rise  of  prices  ?  If  the  capitalists  thought  prices 
were  soon  to  rise  they  would  not  hoard  money,  but  invest  in 
something  which  they  expected  to  rise  in  value.  The  simple 
fact  is  that  under  our  present  financial  policy,  it  is  gold  and  not 
commodities  which  is  rising  in  value.     Gold  is  now  hoarded  be- 


APPENDIX. 


511 


cause  it  is  expected  that  the  coinage  of  silver  may  be  stopped  and 
thus  still  further  enhance  its  value. 

If  the  owners  of  gold  could  be  fully  convinced  that  the  coinage 
of  silver  would  never  be  stopped,  what  would  they  do  ?  It  is  cer- 
tain that  then,  as  now,  they  would  try  to  increase  their  wealth. 
As  soon  as  they  saw  the  source  of  an  increased  demand  for  gold 
dried  up  they  would  see  an  end  to  a  rise  in  its  value  and  would 
exchange  gold  for  things  whose  price  they  expected  would  rise. 
In  other  words,  they  would  invest  in  real  estate,  machinery, 
buildings  and  various  other  things.  No  longer  hoarded,  gold 
would  be  thrown  on  the  market  and  offered  for  sale.  It  would 
consequently  be  practically  plentier, — less  demand  would  exist  for 
it  and  its  value  would  naturally  fall.  This  would  be  evidenced 
by  a  rise  of  wages  and  prices  of  all  kinds.  Better  times  would 
then  reign  for  the  masses  of  the  people. 

But,  the  root  of  the  present  controversy  lies  in  this  fact :  viz., 
When  prices  are  falling  and  low,  the  times  are  better  for  the  zaealthy 
money  lender  than  when  wages  and  prices  are  high.  Hence  the 
selfish  interests  of  that  class  prompt  them  to  desire  low  prices  and 
hard  times  for  the  majority.  Nothing  is  more  absurd  than  to  im- 
agine the  selfish  interest  of  a  rich  money  lender  as  identical  with 
that  of  the  whole  community. 

The  Message  concludes  by  stating,  in  substance,  that  the  pres- 
ent depression  of  prices  and  business  is  due  to  silver  coinage. 

If  this  were  true,  in  nations  which  have  stopped  the  coinage  of 
silver  prices  would  be  higher  than  in  this  country ;  such  nations 
would  be  more  prosperous  than  ourselves.  But  it  is  a  notorious 
fact  that  low  prices  and  business  depression  have  seized  different 
countries  in  the  order  in  which  they  have  demonetized  silver.  De- 
pression of  business  is  greater  in  European  countries,  with  gold 
as  the  sole  standard,  than  in  the  United  States  with  gold,  silver 
and  greenbacks  as  the  legal  tenders.  This  fact  is  universally  con- 
ceded and  not  in  the  least  degree  explained  by  any  theory  ad- 
vanced by  those  who  advocate  our  adoption  of  the  monetary  pol- 
icy of  Europe. 

secretary's  report. 

Let  us  next  briefly  examine  the  chief  points  in  the  Report  of 
the  Secretary  of  the  Treasury.  The  entire  Report  is  based  upon 
the  assumption  that  the  value  of  money  and  the  prices  of  com- 


512 


APPENDIX. 


modities  cannot  be  affected  by  legislation.  But,  curiously  enough, 
the  Report  begins  with  a  suggestion  that  two  of  these  uninfluen- 
tial  laws  be  repealed  :  viz., 

"  I.  The  act  of  Feb.  28,  1878,  which  has  been  construed  as  a  permanent 
appropriation  for  perpetual  Treasury  purchases  of  at  least  $24,000,000 
worth  of  silver  per  annum,  although  from  causes  mostly  foreign  that 
metal  is  now  of  mutable  and  falling  value,  which  must  be  manufactured 
into  coins  of  unlimited  legal  tender  and  issued  to  the  people  of  the  United 
States  as  equivalents  of  our  monetary  unit. 

"2.  The  act  of  May  31,  1878,  which  indefinitely  postponed  fulfillment 
of  the  solemn  pledge  (March  18,  1869)  not  only  of  'redemption,'  but 
also  of  '  payment '  of  all  the  obligations  of  the  United  States  not  bear- 
ing interest,  legalized  as  $346,000,000  paper  money  of  unlimited  legal 
tender,  and  required  the  post-redemption  issue  and  re-issue  of  these 
promises  to  pay  dollars,  equivalents  of  our  monetary  unit." 

If  legislation  have  no  effect,  why  change  the  laws  .'' 

This  repeal,  the  Secretary  informs  us,  can  be  made  "  without 
raising  the  United  States  monetary  unit  of  value  to  a  costlier  dol- 
lar." This  statement  is  the  logical  result  of  the  theory  that 
no  matter  how  much  additional  demand  be  made  for  gold  its 
value  remains  unchanged.  If  the  aforesaid  statement  of  the  Sec- 
retary be  true,  then  all  the  silver  and  all  the  paper  money  in  the 
world  could  at  once  be  destroyed  without  making  a  gold  dollar 
"  a  costlier  dollar."  If  the  doctrine  of  the  Secretary  be  true,  the 
discovery  of  a  mine  from  which  ten  thousand  millions  of  gold 
could  be  readily  taken  would  not  lower  the  value  of  gold.  This 
would  appear  true,  so  long  as  we  adopt  the  notion  that  the  correct 
way  to  test  the  value  of  gold  is  to  compare  one  gold  dollar  with 
another  gold  dollar.  As  one  potato,  at  the  same  time  and  place, 
is  always  worth  another  potato  of  the  same  size  and  quality,  the 
Secretary  might  as  well  say  that  potatoes  have  "an  invariable 
value." 

Both  the  President  and  the  Secretary  speak  of  "  compulsory 
coinage  "  with  the  evident  intention  of  conveying  the  idea  that 
the  Government  is  under  greater  compulsion  in  regard  to  coining- 
silver  than  in  regard  to  coining  gold. 

This  is  clearly  an  unfair  mode  of  stating  the  actual  facts  of 
the  case.  The  Government  by  law  is  under  compulsion  to  coin 
all  the  gold  that  may  be  brought  to  the  mints  for  that  purpose. 
But   the   Government  is  not  under  compulsion  to  coin  a  single 


APPENDIX. 


513 


ounce  of  silver  brought  to  the  mint  by  bullion  owners.  If  the 
Government  were  under  such  compulsion,  silver  coinage  would 
have  been  much  larger  than  it  has  been.  It  is  required  that  not 
less  than  two,  nor  more  than  four  millions  of  silver  per  month  be 
bought  and  coined  by  the  Government.  But  the  matter  is  so 
stated  by  the  Secretary  and  President  as  to  mislead  many  persons. 
The  Report  then  states  : 

"The  history  of  the  monetary  unit  shows  that  from  1792  to  1873  that 
unit  was  embodied  by  law  in  either  metal.  The  arrangement  is  such  as 
is  now  called  bimetallic." 

This  is  true,  but  for  obvious  reasons  the  Secretary  omits  to 
state  the  important  fact  that  the  optioti  of  selecting  the  kind  of 
metal  in  which  obligations  should  be  discharged  has  always  rested 
with  him  who  paid  motiey  and  not  with  him  who  received  it.  Dur- 
ing that  time,  all  the  United  States  bonds  were  authorized  with 
reference  in  each  bond  to  the  legal  coin  in  which  the  bond  was 
to  be  paid.  It  is  now  pretended  that  the  United  States  creditors 
have  the  option  of  directing  how  they  shall  be  paid.  But  when 
these  creditors  originally  bought  the  bonds  they  did  not  give  the 
Government  the  right  to  say  how  payment  should  be  made  for 
said  bonds.  They  paid  for  them  in  what  was  then  the  cheapest 
legal  tender — greenbacks. 

The  Report  next  says : 

"  During  the  time  when  the  371.25  troy  grains  of  fine  silver  continued 
to  be  a  coin  embodiment  of  the  monetary  unit,  there  was  no  appreciable 
fluctuation  in  its  value  as  compared  with  the  mass  of  commodities,  ser- 
vices, and  savings  measured  thereby.  Slight  variations  in  the  gold  coin, 
therefore,  made  solely  for  the  purpose  of  retaining  both  metals  in  use, 
and  for  reaching  a  more  perfect  equivalence  in  order  to  retain  both 
metals  in  use,  are  only  confirmations  added  to  proof  in  the  uniformity 
(371.25)  from  1792  to  1873.  During  the  time  when  23.22  grains  of  pure 
gold  have  been  either  a  concurrent  or  the  single  coin  embodiment  of  our 
monetary  unit,  there  has  been  no  demonstrable  fluctuation  in  its  value  as 
compared  with  the  mass  of  commodities,  services,  and  savings  measured 
thereby." 

This  is  only  another  way  of  stating  that  the  prices  of  labor  and 
commodities,  stated  in  gold  and  silver,  did  not  appreciably  fluctu- 
ate from  1792  to  1873.  But  whoever  will  look  at  an  old  file  of 
newspapers  will  find  great  fluctuations  in  the  average  scale  of  wages 
and  prices  during  that  period  computed  in  gold  and  silver  coins. 
33 


c  I  A  APPENDIX. 

Prof.  Jevons  has  demonstrated  that  from  1809  to  1849,  prices 
of  commodities  fell  in  the  ratio  of  245  to  100.  In  other  words,  an 
ounce  of  gold  or  silver  bullion  was  worth  nearly  two  and  a  half 
times  as  much  in  1849  as  in  1809. 

Every  person  of  rriature  age  knows  from  personal  recollection 
that  prices  have  undergone  great  fluctuations  during  said  time, 
no  matter  whether  stated  in  gold,  silver  or  paper  money. 

But  as  gold  and  silver  during  that  time  had  substantially  the 
same  value,  in  order  to  state  that  gold  has  an  "  invariable  value," 
it  became  necessary  for  the  Secretary  to  claim  that  silver  had 
also  a  fixed  value  up  to  1873.  Suppose  for  the  sake  of  illustration. 
we  assume  that  the  Secretary  be  correct  and  that  silver  did  actual- 
ly have  a  fixed  value  from  1792  to  1873.  What  has  occurred  to 
disturb  this  fixed  value  and  make  silver  "  depreciate  and  fluctuate  "  "i 
The  Secretary  tells  us  in  his  Report  that  the  "  annual  change  in 
the  total  amount  of  gold  and  silver  in  the  world  is  a  petty  percent- 
age,— say  I  33-100  per  cent. — and  is  divided  equally  between 
gold  and  silver."  Thus  it  is  not  even  alleged  that  there  has 
recently  been  any  extraordinary  production  of  silver. 

It  is  also  certain  that  there  has  been  no  change  in  the  physical 
qualities  of  silver, — they  are  now  precisely  what  they  were  a  thou- 
sand years  ago. 

Only  one  change  has  taken  place  and  that  is  the  demonetization 
of  silver.  Previous  to  1873,  the  majority  of  mankind  imagined 
silver  had  "  a  fixed  value  "  because  they  compared  it  simply  with 
itself ;  or  what  was  practically  the  same  thing,  with  its  fellow  legal 
tender,  gold.  But  the  moment  the  legal-tender  quality  was  re- 
moved from  silver  and  its  value  measured  only  by  the  value  of 
gold,  silver  appeared  to  fluctuate,  while  gold,  compared  only  with 
itself,  appeared  to  stand  still. 

If  we  test  the  value  of  silver  by  the  true  method  of  determining 
the  value  of  any  kind  of  money  ;  viz.,  the  average  scale  of  the 
prices  of  labor  and  commodities,  we  shall  find  that  the  so-called 
"  depreciation  "  of  silver  has  kept  about  an  even  pace  with  the 
fall  in  other  prices.  This  shows  that  since  1873,  the  period  during 
which  the  Secretary  tells  us  silver  has  begun  to  "  fluctuate,"  the 
real  value  of  silver  has  changed  but  little.  One  thousand  ounces 
of  silver  bullion  will  to-day,  on  the  average,  buy  more  property 
than  one  thousand  ounces  of  silver  would  buy  in  1873  when  silver 
was  "  at  par  "  with  gold. 


APPENDIX. 


515 


The  Secretary  then  speaks  of  "  the  impotence  of  any  nation's 
legislation  to  affect  prices."  But,  it  is  no  compliment  to  the  Secre- 
tary's intelligence,  to  assume  that  he  does  not  know  perfectly  well 
that  the  legislation  he  asks  for  will  lower  prices,  and  place  the 
control  of  the  currency,  and  therefore  the  control  of  prices,  more 
in  the  hands  of  bankers  than  at  present. 

The  Secretary  makes  a  statement  to  the  effect  that,  inasmuch  as 
the  greater  portion  of  our  foreign  trade  is  with  nations  using  gold, 
therefore  we  need  a  gold  currency,  so  that  our  coins  can  be 
shipped  in  payment  of  balances. 

Ignorant  people  suppose  our  coins  are  thus  shipped.  But  the 
Secretary  of  the  Treasury  should  know  that  foreign  balances  are 
paid  with  bullion  and  not  with  coin.  Whether  we  have  coin  of 
any  kind  in  circulation  or  not,  bullion  pays  the  balance. 

The  Report  lastly  says  : 

"  The  range  of  prices  is  lower  to-day  than  since  the  discovery  of  gold 
in  California.  Man's  inventions  and  industries  are  hammering  down  the 
prices  of  all  the  products  of  man's  labor.  If  one  New  England  town,  by 
one  week's  labor,  can  shoe  all  the  feet  in  Cincinnati,  Chicago,  and  St. 
Louis  for  a  year,  when  a  year's  work  was  too  little  one  decade  ago,  how 
shall  not  the  price  of  shoes  go  down  ?  Everywhere  the  effort  is  to  ob- 
tain shelter,  clothing,  food,  and  the  ornaments  of  these  necessities  of  life 
at  a  smaller  expense  of  mental  energy  and  bodily  toil.  The  history  of  in- 
ventions is  the  record  of  permanent  reductions  of  the  cost  of  getting 
man's  necessities.  This  reduced  cost  makes  possible  the  enlargement 
of  the  comforts  of  all,  a  higher  and  higher  standard  of  Hfe  for  the  poor. 
How  shall  the  reduced  cost  not  appear  in  dropping  prices  ?  But  things 
on  hand  bought  to  sell  fall  while  held.  To  the  trading  classes  a  fall  of 
prices  when  comprised  in  too  brief  periods  cannot  but  bring  some  measure 
of  distress  ;  when  continued  for  too  long  periods,  cannot  but  entail  a  gen- 
'eral  depression  of  trade.  But  when  it  is  neither  sudden  nor  prolonged 
enough  to  throw  large  numbers  out  of  employment,  the  great  mass 
of  working  men  and  women  find  in  lower  prices  almost  unmi.xed  good. 
Wages  are  always  at  once  exchanged,  with  some  deduction  for  saving, 
and  if  prices  are  lower  the  same  wages  buy  more.  Even  where  reduced 
prices  necessitate  reduced  wages  (and  on  the  whole,  even  in  Europe, 
the  return  to  labor  grows  more  and  more)  the  wage-receiver  gets  the 
advantage  of  wages  being  slow  to  move,  as  he  gets  the  disadvantage  of 
their  being  the  last  to  move  when  from  a  degradation  of  the  unit  of 
value,  or  its  legal  equivalent,  prices  measured  by  that  unit  going  up,  the 
same  wages  buy  less.  To  keep  the  unit  of  value  stable  is  the  true  limit 
of  legislative  control  over  prices." 


5i6 


APPENDIX. 


As  prices  are  an  infallible  index  of  the  value  of  money,  the 
admission  that  prices  are  now  lower  than  since  1849  is  an  admis- 
sion that  gold  has  risen  over  twenty-five  per  cent,  in  value  since 
1873.  It  is  also  an  admission,  that  if  the  holders  of  United 
States  bonds  were  now  paid  in  silver  dollars,  according  to  the 
tenor  of  said  bonds,  they  would  receive  more  actual  value  than 
they  would  have  received  in  1873,  if  they  had  then  been  paid  in 
gold  dollars.  Said  admission  is  also  equivalent  to  saying  that, 
since  1873,  gold  has  fluctuated  in  value  more  than  silver,  since 
there  has  been  a  greater  uniformity  of  prices  for  the  past  twenty- 
five  years  stated  in  silver  than  stated  in  gold. 

But  the  Secretary  tries  to  make  us  think  that  said  fall  in  prices 
has  been  caused  by  "  man's  inventions  and  industries  "  and  not 
by  a  diminution  of  the  amount  of  money  in  circulation.  In  so 
doing,  he  abandons  the  long  and  indisputably  established  princi- 
ple that  prices  are  invariably  affected  by  either  increasing  or  di- 
minishing the  amount  of  the  circulating  money  in  which  those 
prices  are  stated;  no  matter  of  what  materials  that  money  be  made. 
If  the  Secretary  be  correct,  the  fact  that  a  pair  of  boots,  in  Rich- 
mond, on  January  i,  1865,  were  worth  three  or  four  hundred 
dollars,  did  not  show  an  increase  in  the  currency  which  bought 
said  boots,  but  indicated  a  want  of  "  invention  and  industry." 

Prof.  Rogers,  the  greatest  living  authority  on  wages  and  prices 
in  England,  tells  us  that  from  1450  to  1877  the  average  scale  of 
prices  in  England  rose  1200  per  cent. ; — that  is,  they  were,  on  the 
average,  twelve  times  as  high  in  1877  as  in  1450. 

In  no  period  of  English  history  have  "  man's  inventions  and 
industries "  made  greater  progress  than  during  the  period  in 
which  this  great  rise  of  prices  has  occurred. 

If  the  theory  of  the  Secretary  were  correct,  said  fact  would  be 
reversed  ; — prices  would  have  been  on  the  average  lower  in  1877 
than  in  1450.  The  plain  fact,  known  to  every  student  of  history, 
is  that  the  discovery  of  the  gold  and  silver  mines  of  America 
poured  a  vast  amount  of  the  precious  metals  into  the  channels  of 
commerce  and  largely  raised  prices  throughout  the  civilized  world. 

The  New  York  Tribune,  a  zealous  supporter  of  the  Secretary's 
policy,  on  Dec.  28,  1885,  says  : 

"  It  is  often  said  that  silver  is  worth  as  much  as  it  was  in  1870.  In  the 
sense  in  which  that  phrase  is  ordinarily  used  and  meant  to  be  under- 
stood, the  statement  is   not  true,  and  it  is  no  defense  of  it  to  say  that 


APPENDIX, 


517 


wheat,  corn  and  other  important  products  have  declined  since  1870  a 
little  more  than  silver.  They  have  declined  in  the  main  for  reasons 
which  have  nothing  to  do  with  the  use  or  disuse  of  silver — because  of 
cheaper  transportation,  for  instance,  and  the  use  of  improved  machinery, 
and  the  accumulation  of  capital  and  the  low  rate  of  interest. 

From  1850  to  1870,  transportation  steadily  grew  "cheaper"; 
there  was  greater  "  use  of  improved  machinery  "  ;  a  great  "  accu- 
mulation of  capital  "  ;  and  a  tendency  to  a  "  low  rate  of  interest." 
During  those  twenty  years,  if  the  Secretary  and  Tribune  be  cor. 
rect  in  their  theories,  prices  would  have  steadily  fallen.  But, 
every  man  of  mature  age  knows  perfectly  well,  from  personal 
observation,  that  those  years  were  characterized  by  a  considerable 
rise  in  the  average  rate  of  prices.  Furthermore,  every  intelli- 
gent man  knows  that  the  events  which  are  above  enumerated  as 
causing  lower  prices  were  in  as  full  operation  before,  as  since  1870. 
Theories  which  are  thus  contradicted  by  facts  may  amuse  some 
persons  but  they  have  no  other  utility.  The  average  price  of  com- 
modities has  fallen  because,  while  the  products  of  industry  have 
increased  in  number  and  amount,  the  money  in  which  the  prices  of 
those  products  are  stated  has  relatively  diminished  in  amount. 

The  Secretary's  language  implies  belief  that  prices  follow  a 
mysterious  "cycle,"  and  that  the  value  of  a  dollar  is  beyond 
"  legislative  control."  But  there  is  no  greater  mystery  about 
the  rise  or  the  fall  of  the  value  of  a  "  dollar  "  than  there  is  about 
the  value  of  a  bushel  of  wheat.  A  diminution  of  the  number  of 
bushels  of  wheat  in  a  country  tends  to  increase  the  value  of  each 
one  of  those  bushels.  An  increase  of  bushels  tends  to  make  them 
cheaper.  The  value  of  "  dollars,"  no  matter  of  what  material 
they  be  made,  depends  on  precisely  the  same  principle  as  the 
value  of  "  bushels." 

Furthermore,  we  should  remember  that  the  value  of  a  bushel 
of  any  kind  of  grain  can  be  increased  without  diminishing  the 
number  of  bushels  of  that  grain  in  existence.  Suppose  the  farm- 
ers of  a  certain  country  have  raised  a  hundred  million  bushels  of 
corn  and  a  hundred  million  bushels  of  oats.  If,  in  some  way, 
the  oats  be  destroyed,  the  corn  is  in  greater  demand  to  feed 
animals  with  and  consequently  is  made  more  valuable.  It  is 
always  the  relative  plenty  or  scarcity  of  a  thing  which  lowers  or 
raises  its  value.  The  value  of  gold  and  silver  is  governed  by 
the  same  laws  which  regulate  the  value  of  corn  and  oats.     Gold 


5i8 


APPENDIX. 


was  not  diminished  in  actual  amount  by  demonetizing  silver. 
The  fall  of  prices  stated  in  gold  indicates  the  extent  to  which 
it  has  been  made  relatively  scarce  by  demonetizing  silver. 

It  is  true  that  invention  enables  the  same  amount  of  labor  to 
produce  more  wealth  than  previously,  and  that  changes  are  thus 
wrought  in  the  ixlative  prices  of  different  things.  But  such  altera- ' 
tions  do  not  affect  the  average  scale  of  wages  and  prices.  While 
the  advance  in  science,  art,  and  mechanical  skill  has  greatly  low- 
ered the  prices  of  many  things  it  has  enormously  raised  the  value 
of  many  others.  For  example,  witness  the  changes  in  the  value  of 
real  estate,  timber,  coal,  stone,  sand,  water  and  many  other  things 
which  had  almost  no  price  before  invention  brought  them  in  de- 
mand by  creating  a  new  or  an  additional  use  for  them.  The  true 
test  of  prices  is  found  in  a  careful  comparison  of  the  prices  of  all 
things  (including,  of  course,  labor)  bought  and  sold  at  one  period 
of  time,  with  the  prices  of  all  things  bought  and  sold  at  another 
period.  Such  a  test  shows  the  amount  of  money  in  circulation  the 
dominant  cause  of  changes  in  the  average  scale  of  prices. 

Since  1873,  "  invention  and  industry  "  have  been  no  greater  than 
during  the  twelve  years  immediately  before  that  time.  But  for 
the  twelve  years  which  have  elapsed  since  1873  prices  have  steadily 
fallen.  And  this  fall  is  as  noticeable  as  anywhere  else  in  those 
commodities  in  the  production  of  which  no  marked  invention  has 
occurred.  For  instance,  note  the  great  fall  in  cotton  ;  pig  iron,  pork, 
wheat,  cheese  and  other  products  of  the  soil.  No  increased 
"  invention  "  has  taken  place  in  the  mode  of  producing  the  great 
mass  of  valuable  things  whose  price  has  fallen. 

The  Secretary,  like  the  majority  of  bankers,  has  a  great  affec- 
tion for  "working  men  and  women."  He  tells  us  that  the  fall 
in  prices  has  been  to  those  classes  "  almost  unmixed  good." 

Let  the  Secretary  test  this  statement  by  actual  contact  with 
"  working  men  and  women."  Let  him  first  visit  a  few  individuals 
who  form  part  of  the  millions  of  farmers  whom  the  enhanced  value 
of  gold  has  compelled  to  sell  the  products  of  their  toil  at  very  low 
prices  while  their  taxes  and  debts  were  unchanged.  Let  him  next 
talk  with  the  laborers  in  mines,  forges,  and  factories  and  ask  : 
"  Are  you  not  better  off  now  than  in  good  times  ?  " 

If  the  Secretary  be  right  in  regard  to  the  blessing  of  low  prices 
and  hard  times  to  the  laboring  classes,  why  should  he  talk  about 


APPENDIX. 


519 


*'  our  present  troubles  "  as  he  does  ?  If  such  be  the  case,  we  are 
not  in  "  trouble." 

Is  not  the  talk  of  all  rich  money  lenders  about  the  "  blessing  to 
the  poor  of  low  prices  "  a  deceitful  mockery  ?  Common  observa- 
tion tells  us  that  the  wages  of  laborers  are  usually  cut  down  more 
than  the  percentage  of  fall  in  the  prices  of  the  necessaries  they 
buy.  This  must  necessarily  be  so.  When  prices  fall,  money 
rises  in  value.  The  creditor  classes  then  make  gains  and  what 
they  gain  some  one  else  must  lose.  If  wages  went  down  only  to 
the  extent  that  other  prices  fell,  the  wages  receiving  classes  would 
not  be  compelled  to  bear  any  part  of  the  losses  which  some  per- 
sons must  incur  in  order  to  increase  the  value  of  the  creditor's 
bonds  and  mortgages.  It  is  matter  of  common  knowledge  that 
what  are  called  "  hard  times  "  usually  bear  with  more  severity  on 
those  who  work  for  daily  wages  and  on  the  farmers  than  on  any 
other  classes.  When  market  prices  are  falling,  the  retail  dealers 
always  endeavor  to  throw  the  consequent  losses  on  their  custom- 
ers. Thus  the  assumption  of  the  Secretary,  that  the  loss  from 
falling  prices  is  borne  entirely  by  the  trading  classes  is  incorrect. 
Those  who  have  a  fixed  annual  salary,  like  the  President  and  the 
Secretary,  are  better  off  in  "hard  times"  than  in  "good  times." 
And  to  all  persons  under  similar  circumstances,  "  hard  times  for 
the  majority"  means  good  times  for  them. 

What  does  the  Secretary  mean  by  saying  that  to  "  keep  the  unit 
of  value  stable  is  the  true  limit  of  legislative  control  over  prices  ?  " 
If  he  mean  that  the  same  specific  things  should  always  form  the 
legal  tender  ;  that  coins  should  always  be  of  the  same  weight,  fine- 
ness and  material ;  then  the  act  of  1873  which  changed  the  specific 
things  constituting  the  national  legal  tenders  was  an  outrage 
which  should  at  once  be  redressed  by  restoring  the  coinage  to 
the  previously  established  specific  things  as  legal  tenders  ;  to  wit, 
23  22-100  grs.  of  gold  or  371  1-4  grs.  of  silver,  as  one  legal  dollar 
at  the  option  of  the  payer  of  said  dollar.  Both  of  said  coins  to 
have  no  coinage  limit  except  the  amount  of  gold  or  silver  bullion 
brought  by  the  people  to  the  mints. 

If  the  Secretary  mean,  by  the  words  "  stable  value,"  a  unit  of 
which  either  the  weight  or  the  materials  have  been,  or  should  be, 
changed  in  order  to  keep  its  value  stable,  then  he  means  that  as 
gold  has  risen  in  value  we  should  at  once  reduce  the  weight  of  the 


^2o  APPENDIX. 

gold  dollar  for  the  purpose  of  having  it  of  the  same  value  it  was 
when  our  Government  bonds  were  first  sold. 

If  the  Secretary  intend  to  convey  the  idea  that  the  gold  dollar 
is  of  the  same  value  now  that  it  was  when  the  silver  dollar  had  free 
coinage,  then  he  intends  to  convey  an  idea  that  is  utterly  false. 
He  might  as  well  say  that  the  destruction  of  all  the  bituminous  coal 
in  the  world  would  not  raise  the  value  of  anthracite  coal.  When 
the  silver  dollar  was  demonetized  the  gold  dollar  was  thereby 
placed  under  different  conditions ;  the  amount  of  gold  in  the 
world  was  not  thereby  increased,  but  the  use,  and  consequent 
demand  for  gold  were  largely  increased.  The  relative  amount  of 
gold  in  the  world  was  diminished  by  demonetizing  silver. 

Suppose  the  various  nations  which  have  demonetized  silver  had 
selected  gold  as  the  metal  to  be  discarded.  Would  silver  then  have 
remained  at  the  same  value  it  had  when  gold  was  its  fellow  legal 
tender  ?  Not  at  all.  The  amount  of  silver  would  not  be  in- 
creased by  such  legislation  but  the  demand  for  silver  would  be 
enormously  increased.  Silver  compared  with  itself  would  then  be 
unchanged  in  value  ; — it  would  remain  at  "par."  But  compared 
with  gold  and  all  other  commodities,  it  would  have  risen  in  value 
just  as  gold  now  has.  This  fact  is  virtually  conceded  by  both  the 
President  and  Secretary  ;  otherwise  all  their  talk  about  an  "  inter- 
national "  arrangement  for  coinage  is  the  sheerest  nonsense.  If 
legislation  have  no  effect  on  the  value  of  gold,  then  it  necessarily 
follows  that  international  legislation  in  reference  to  coinage  could 
not  have  the  slightest  effect  on  the  value  of  either  gold  or  silver. 

If  the  theories  of  the  President  and  Secretary  be  true,  a  unani- 
mous agreement  of  all  the  nations  in  the  world  to  coin  silver  at  a 
definite  ratio  to  gold  would  not  in  the  least  change  the  relative 
demand  for  one  or  other  of  those  metals  ;  and  consequently 
would  not  alter  their  relative  value.  But  the  Secretary  informs 
us  that  the  "  fixed  value  "  which  silver  had  prior  to  1873  "  was 
upset  by  Germany."  If  legislation  have  no  effect  on  value  how 
could  German  laws  "  upset  "  the  value  of  silver  ?  Do  not  such 
contradictions  show  the  falsity  of  the  Secretary's  theories  ? 

Artful  sophistry  may  endeavor  to  conceal  it,  but  the  fact  re- 
mains unaltered,  that  tampering  with  the  coinage  and  currency  is 
an  insidious  means  of  either  raising  or  lowering  prices.  When 
prices  are  thus  stealthily  altered  the  crime  is  precisely  the  same 
as  when  theft  is  committed  by  lessening. the  weight  or  fineness 


APPENDIX. 


521 


of  coins.  How  low  could  prices  and  wages  be  reduced  by  those 
now  in  control  of  the  financial  policy  of  this  country  and  Europe  ? 
Without  changing  the  weight  of  a  gold  dollar,  it  is  perfectly  cer- 
tain, that  if  permitted  by  the  people  the  currency  could  be  so  manip- 
ulated by  legislation  that  the  price  of  a  barrel  of  good  flour  in 
New  York  City  would  be  only  one  dollar,  and  all  other  prices 
correspondingly  low.  This  would  necessarily  involve  the  concen- 
tration of  wealth  in  few  hands  to  an  extent  compared  with  which 
the  present  disparity  would  appear  insignificant. 

All  history  tells  a  monotonous  story  in  regard  to  wrong  and 
oppression.  Once  fully  begun,  encroachments  on  popular  rights 
have  never  ended  by  the  voluntary  acts  of  the  spoliators.  In  all 
ages  they  have  invariably  continued  until  met  by  a  force  superior 
to  their  own.  Human  nature  is  unchanged.  What  always  has 
been,  will  again  occur.  The  only  uncertain  thing  about  the  pres- 
ent situation  is  this  :  How  much  will  they  first  endure  ;  how 
much  time  will  pass,  before  the  masses  of  the  people  discover  the 
actual  facts,  realize  how  they  have  been,  and  are  being  deceived 
and  wronged,  and  assert  their  superior  power  ?  In  the  United 
States  it  is  easy  for  them  to  quietly  do  so,  by  action  at  the  ballot 
boxes.  The  needful  thing  is  that  a  majority  of  voters  should  pos- 
sess a  sufficiently  clear  knowledge  of  principles  to  enable  them 
to  correctly  interpret  unpleasant  facts  relating  to  the  political  and 
social  organization  of  this  country. 


INDEX. 


INTRODUCTORY. 

Natural  laws  are  not  only  invariable 
but  they  apply  impartially  to  all 
things,  I. 

What  political  economy  is,  2. 

A  mistaken  belief,  3. 

How  economic  laws  should  be  con- 
sidered, 3. 

Mankind  are  governed  by  many 
emotions  and  thoughts,  4. 

Common  mode  of  writing  economic 
works,  5. 

Political  economy  is  an  imperfect 
science,  6. 

A  confession,  8. 

Ignorance  is  the  mother  of  credu- 
lity, 9. 

The  plain  truth,  11. 

Why  mankind  make  such  slow 
progress,  1 1. 

Original  thought  is  not  common,  13. 

Mankind  prefer  old  to  new  things, 
14. 

Evils  perpetuate  themselves,  15. 

Need  of  elementary  study,  16. 

Terrible  fruits  of  false  premises,  18. 

CHAPTER  II. 

W^hat    is    money  ?    Its    functions ; 

very   important   that   all   should 

understand,  19. 
Prevalent  ideas  about  money,  19. 
False  dogmas  by  the  million,  22. 
How  the  people  came  to  be  misled, 

23- 

CHAPTER  III. 

Why  we  use  money,  24. 
What  a  science  is,  24. 
How  to  study  money,  25. 
What  capital  is,  26. 


Distinction    between    wealth    and 

capital,  27. 
No  use  for  money  when  no  wealth 

exists,  28. 
A  colony  without  wealth,  29. 
Need  of  tools,  30. 
Value  of  a  thing  is  dependent  on 

circumstances,  31. 
The  value  of  land,  32. 
Need  of  capital,  32. 
How  commerce  began,  33. 
Definition  of  trade,  35. 
How  trade  is  often  carried  on,  35. 
W^hat  simple  barter  is,  36. 
Advantages  of  direct  barter,  36. 
Mechanism   of  exchanging  things 

by  use  of  money,  37. 
Who  are  principals  in  a  trade,  38. 
Simple  barter  is  still  in  use,  40. 
How  barter  tends  to  produce  fair 

bargains,  41. 
Bartering  labor,  42. 
Making  "  bees,"  44. 
Growth  of  classes,  45. 
What  a  snob  is,  45. 
Barter  often  the  best  way  to  trade, 

45- 

Profits  of  middlemen,  46. 

Barter  could  be  employed  more 
than  it  is,  49. 

Best  test  of  wages,  49. 

Facilities  for  barter  should  be  in- 
creased, 50. 

Importance  of  citizens  being  ac- 
quainted, 52. 

Wealth  of  cities,  52. 

Facts  in  regard  to  middlemen,  53. 

Parallel  railroads,  53. 

Increase  of  middlemen,  54. 

CHAPTER    IV. 

Indirect  barter,  55. 

Origin  of  commission  merchants,  56. 

Origin  of  merchants,  57. 


523 


524 


INDEX. 


A  merchant's  profits  are  for  infor- 
mation, 58. 

Fairs,  59. 

When  indirect  barter  begins,  60. 

Foreign  commerce  is  barter,  61. 

Effect  of  destruction  of  gold  and 
silver,  62. 

CHAPTER  V. 

Money,  63. 

Trade  through  a  third  person,  64. 

Trade  through  a  third  thing,  64. 

Ancient  kinds  of  money,  64. 

The  peculiar  use  of  money,  65. 

Mechanism  of  trading  through  the 
medium  of  a  third  thing,  65. 

What  commerce  is  and  how  it  de- 
veloped, 67. 

Difference  between  barter  and  ex- 
change with  money,  68. 

Definition  of  the  word  "  money,"  69. 

A  common  but  false  idea,  70. 

Some  debts  can  only  be  paid  with 
coin,  72. 

The  same  thing  may  have  several 
definitions,  73. 

Why  barter  is  often  impracticable, 

74- 
Origin  of  the  use  of  money,  76. 
Legal-tender  laws,  77. 
Effect  of  a  change  in  value  of  the 

legal  tender,  78. 
Development  of  money,  80. 
A  poor  old  thing  is  preferred  to  a 

good  new  thing,  82. 
What  we  can  reasonably  expect,  84. 
Bankers  and  money,  85. 
An  irresistible  movement,  85. 

CHAPTER    VI. 

Origin  of  prices,  87, 

Primitive  mode  of  stating  prices,  88. 

Need  of  comparing  all  things  with 
a  few  things,  89. 

Money  of  account,  91. 

A  price  is  always  a  mode  of  com- 
paring one  thing  with  another,  93. 

A  money  price  is  always  a  numer- 
ical comparison,  94. 

Antiquity  of  numerical  comparison, 

95- 
Fractional  money,  95. 
Primitive  mode  of  making  change, 

97. 


Division  of  values  one  function  of 
money,  99. 

Money  of  account,  resumed,  100. 

How  value  is  expressed,  loi. 

What  happens  when  specie  pay- 
ments are  suspended,  103. 

Money  of  account  would  survive 
the  destruction  of  all  other 
money,  104. 

False  predictions,  105. 

The  weight  of  coins  is  seldom  con- 
sidered, 106. 

Rise  and  fall  of  prices,  107. 

CHAPTER  Vn. 

Effect  of  legislation  on  value,  no. 

What  legislation  is,  in. 

Power    of    legislation    is     limited, 

113- 

The  laws  of  trade,  113. 

An  absurd  question,  n4. 

Human  capacity  is  limited,  n5. 

Inconsistency  of  those  who  deny 
that  legislation  can  create  value, 
n6. 

Historical  example  of  the  creation 
of  value  by  legislation,  n7. 

Evidences  that  a  thing  is  valuable, 
n9. 

Value  of  a  man's  services,  120. 

Legislation  may  change  the  value 
of  a  person's  services,  121. 

Historical  legislation  which  affect- 
ed values,  121. 

Effect  of  the  aforesaid  law,  125. 

What  made  the  aforesaid  law  pos- 
sible, 125.  . 

A  plea  in  defense  of  the  money 
lenders,  126. 

Effect  of  other  legislation  on  paper 
money,  126. 

Bankers'  schemes,  127. 

National  bank  act,  128. 

Subterfuges,  130. 

Why  national  bank-notes  have  not 
been  destroyed,  130. 

Attacks  on  the  greenbacks,  131. 

The  five-twenty  bonds,  132. 

Difficulty  of  satisfying  avarice,  133. 

A  hypocritical  pretense,  134. 

Proclivity  of  mankind  to  hypocrisy, 

134- 
Means   employed  to  perpetrate   a 
crime,  136. 


INDEX. 


525 


Why   Horatio  Seymour  was    de- 
feated, 137. 
National  credit,  138. 
What  experience  teaches,  138. 
Effect  of   act  of   March    18,  1869, 

139- 
When    legislation    creates    value, 

139- 

Other  acts  of  repudiation  and  dis- 
grace, 140. 

What  made  the  aforesaid  wrongs 
possible,  142.    J, 

Fruits  of  crime  and  folly,  143. 

Views  of  a  so-called  statesman,  144. 

Simple  facts  overthrow  false  theo- 
ries, 144. 

CHAPTER  VIII. 

Value  ;  a  clear  understanding  of  its 

nature  indispensable,  146. 
How  to  study  value,  147. 
Location  apparently  affects  value, 

148. 
Creation  of  value  by  transportation, 

149. 
Effect  of  time  in  creating  value,  152. 
Difference     between     value      and 

weight  and  measure,  152. 
Change  of  place  not  the  real  cause 

of  changes  in  value,  153. 
Men  change  values  by  time,  place, 

and  mode  of  sale,  154. 
A  merchant's  success,  155. 
The  essence  of  value,  156. 
Intrinsic  value,  156. 
Changes  in  value  in  consequence  of 

changes  in  circumstances,  157. 
The  result  which  creates  value,  159. 
Unusual  values,  160. 
Value  of  water,  160. 
Changes     of    value     are     always 

wrought  by  the  same  law,  161. 
How  value  is  diminished,  162. 
How  value  is  increased,  163. 
What  gives  stability  to  values,  164. 
Common  idea  of  the  cause  of  value, 

164. 
Why  land  has  risen  in  value,  165. 
Why  personal  property  changes  in 

value,  165. 
Effect  of  law  on  the  value  of  gold 

and  silver,  166. 
Things  do  ngt  possess  two  values, 

167. 


Exchangeable  value,  168. 

Final  analysis  of  the  nature  of 
value,  170. 

Different  amounts  of  value  created 
by  the  same  amount  of  labor,  171. 

Why  labor  does  not  always  create 
wealth,  172. 

How  we  state  value,  174. 

Distinction  between  value  and  in- 
herent qualities,  177. 

Value  not  an  intrinsic  quality,  178. 

Legislation  has  no  effect  on  intrin- 
sic qualities,  179. 

A  prolific  error,  180. 

What  is  necessary  to  the  existence 
of  value,  1 80. 

Value  is  always  relative,  181. 

Only  one  way  to  learn  the  nature 
of  value,  183. 

False  theories  in  regard  to  land, 
184. 

CHAPTER  IX. 

The  silver  question  •  it  compre- 
hends many  things,  187. 

Historical  sketch  of  the  silver  dol- 
lar, 188. 

Acts  of  1834  and  1837,  190. 

Relative  value  of  silver  and  gold 
dollars,  191. 

Option  of  payment  by  either  gold 
or  silver,  191. 

Tendency  of  commerce,  192. 

Established  right  of  both  creditors 
and  debtors,  193. 

Silver  coinage,  194. 

Effect  of  demonetizing  silver,  194. 

Contagiousness  of  vice,  195. 

False  doctrines  framed  into  law, 
196. 

Fundamental  facts  about  gold  and 
silver,  197. 

Gold  and  silver  production,  198. 

World's  production,  estimated  in 
pounds  for  twenty-year  periods, 
198. 

World's  production  of  precious 
metals,  estimated  in  dollars  for 
different  periods,  199. 

World's  production  of  gold  and 
silver  for  383  years,  estimated  in 
dollars,  for  different  periods  of 
time,  200. 

Attempt  to  demonetize  gold,  202. 


526 


INDEX. 


Present  consumption  of  gold  in  the 
arts,  203. 

Origin  of  tlie  war  on  silver,  203. 

An  old  subterfuge,  205. 

Effect  of  legislation  on  the  value  of 
a  dollar,  206. 

Value  of  all  things  dependent  on 
the  same  law,  207. 

An  example  of  legislative  theft, 
208. 

A  talk  with  a  clergyman,  209. 

One  purpose  under  various  pre- 
tenses, 210. 

A  doctrine  dangerous  to  creditors, 
•211. 

Ought  the  silver  dollar  to  be  made 
heavier?  212. 

Danger  of  robbing  debtors,  213. 

Debt  not  disreputable,  213. 

The  true  doctrine,  214. 

Nothing  is  more  detestable  than 
hypocrisy,  214. 

The  cry  for  honesty,  215. 

Groundless  charges  against  silver, 
217. 

Why  silver  does  not  circulate,  217. 

Superiority  of  paper  money,  218. 

The  essential  allegation  in  favor  of 
gold,  221. 

Has  gold  a  fixed  value?  222. 

The  bullion  report,  222. 

Facts  which  overthrow  the  com- 
mon theory  in  regard  to  gold, 
224. 

Origin  of  a  belief  in  the  fixed  value 
of  gold,  224. 

By  comparison  with  things  other 
than  itself  is  the  only  way  in 
which  we  can  ascertain  and  state 
any  of  the  qualities  of  any  object 
or  thing,  226. 

All  ideas  are  relative,  227. 

Need  of  comparing  one  thing  with 
something  beside  itself,  228. 

Value  should  be  tested  as  all  other 
things  are,  229. 

Logical  results  of  comparing  gold 
only  with  gold,  230. 

Result  of  unlimited  coinage  of  sil- 
ver, 231. 

Corrett  mode  of  stating  the  value 
of  gold  and  silver,  232. 

What  a  price  is,  233. 

Money  changes  in  price  like  other 
things,  234. 


How  to  test  the  price  of  money, 

234- 
The  price  of  gold,  235. 
Correct  test  of  the  rate  of  interest, 

236. 
Public  debts  and  taxes,  237. 
An  example  of  benevolence,  237. 
The  true  explanation,  238. 
What   has   changed    the   value   of 

gold,  238. 
America  bearing   down  the  prices 

of  American  goods,  239. 
Effect  of  lowering  prices  in  Eng- 
land, 239. 
The    delusion     that     gold     prices 

would  not  fall,  240. 
Effect   of    making    a   metal   legal 

tender,  241. 
Has   silver  depreciated   in  value? 

243- 

How  to  test  the  value  of  silver, 
245. 

Table  of  relative  prices,  250,  251. 

Another  comparison  of  prices,  253. 

Average  and  comparative  prices  of 
the  principal  domestic  commod- 
ities exported  from  the  United 
States  from  declared  values  at 
time  of  export,  in  gold,  254,  255. 

Ought  an  equality  to  be  maintained 
between  the  value  of  the  gold 
and  the  silver  dollar,  256. 

Statements  of  the  New  York  Tri- 
bune, 256. 

Silver  more  stable  in  value  than 
gold,  257. 

Stability  of  prices  is  the  practical 
result  of  a  stable  currency,  259. 

The  125-cent  dollar,  260. 

Labor,  a  test  of  value,  260. 

Silver  has  risen  in  value,  261. 

Why  silver  has  not  fallen  in  value, 
261. 

Silver  has  always  fluctuated  in 
value,  263. 

Why  England  has  a  gold  currency, 
264. 

Should  we  make  times  harder  in 
Europe?  265. 

Are  payments  in  silver  honest  ? 
265. 

Written  contracts  more  reliable 
than  vague  understandings,  267. 

A  man  cannot  lose  what  he  never 
owned,  268. 


INDEX. 


527 


Differences  in  relative  value  of  gold 

and  silver,  268. 
A    suggestion    for    consideration, 

269. 
Result  of  entire  demonetization  of 

silver,  271. 
The  idea  of  coercing  England,  271. 
Ought  prices  to  be  depressed  by 

legislation  ?  272. 
The  best  kind  of  money,  273. 
Stable  money  best  for  the  masses, 

274. 
A  stable  currency  best  for  debtors, 

275. 
Why  different  classes  have  differ- 
ent ideas,  275, 
A  notorious  fact,  276. 
A  letter  from  an  "  economist,"  276, 

CHAPTER   X. 

Is  money  capital  ?  280. 

Nature  of  capital,  280. 

Similarity  betw^een  money  and 
blood,  281. 

Money  helps  production  without 
forming  part  of  products,  281. 

No  kind  of  capital  produces  with- 
out labor,  282. 

Many  kinds  of  capital  have  special 
functions,  282. 

All  hoarded  things  are  useless 
when  hoarded,  283. 

A  useless  thing  is  not  capital,  283. 

When  money  is  used,  284. 

The  true  test  of  money,  285. 

Control  of  money  is  control  of  la- 
bor, 285. 

How  money  may  be  controlled,  286. 

Who  should  control  the  amount  of 
money,  287. 

The  true  doctrine,  288. 

Jeffersonian  democracy,  289. 

A  conservative  measure,  290. 

CHAPTER  XI. 

Effect  of  changes  in  the  amount  of 

money,  291. 
W^hat  a  dollar  is,  292. 
Why  prices  fall  to  such  an  extent 

when  the  currency  is  contracted, 

294. 
How  we  state  the  value  of  a  dollar, 

295. 


Effect  of  habit  on  ideas  of  the  value 

of  a  dollar,  296. 
Dollars  and  bushels  are  governed 

alike,  297.  [298. 

How  monopoly  can  change  prices. 
Monopoly  can  change  the  value  of 

a  dollar,  298. 
Monopolies  in  California,  299. 
Money  kings  wish  to  corner  money, 

299. 
Creditors  can  be  robbed  by  inflat- 
ing the  currency,  300. 
History  of  inflations,  300. 
Paper  money  is  not  helped  by  what 

is  "  back  of  it,"  301. 
Inflation  is  possible  without  issuing 

paper  money,  302. 
Paper  money  inflation  a  pretext  for 

crime,  302. 
Not  a  fancy  sketch,  304. 
Sudden   changes   in   the   currency 

paralyze  business,  304. 
Why  money  is  hoarded  when  prices 

are  falling,  305. 
The  true  test  of  the  cheapness  of 

money,  305. 
Difference  between  temporary  pos- 
session of  money  and  ownership 

of  it,  305. 
A  mistake  in  diagnosis,  307, 
A  typical  writer,  308. 
Lack  of  confidence  in  prices  is  the 

reason  men  hoard  money,  310. 
Effect    of    slow    changes    in    the 

amount  of  money,  310. 
What  we  should  seek,  312, 

CHAPTER  XII. 

Alleged  causes  of  hard  times :  The 
real  causes  are  not  usually  as- 
signed, 313. 

Actions  are  more  trustworthy  than 
words,  314. 

No  lack  of  confidence  in  silver  dol- 
lars, 314. 

The  confidence  cry,  315. 

The  bankrupt  law  did  not  make 
hard  times,  317. 

Overproduction,  317. 

What  production  is,  318. 

Tendency  of  poverty,  319. 

Tramps,  320. 

Capacity  to  labor  is  a  form  of  prop- 
erty, 321. 


528 


INDEX. 


The  farmers  and  overproduction, 
321. 

Who  are  benefited  by  falling  prices  ? 
'^22, 

London  and  New  York  are  the 
chief  authors  of  the  cry  "  over- 
production," 322. 

A  temporary  cure  of  "  overproduc- 
tion," 323. 

Great  changes  in  the  amount  of 
money  in  circulation  destroy 
wealth,  324. 

When  a  thing  has  the  greatest 
value,  324. 

What  each  person  should  possess, 

325- 
An  example  of  destruction  of  value, 

325- 
Report  of  an  embassy  from  China, 

327- 

CHAPTER  XIII. 

Prices  :  They  are  always  an  ap- 
praisal of  two  things  and  a  com- 
parison of  one  with  the  other,  333. 

What  hard  pan  is,  334. 

13th-century  prices,  334. 

A  wedding  in  1528,  334. 

Causes  of  fluctuations  in  prices,  335. 

Natural  remedies,  337. 

Discounting  the  future,  338. 

Dangers  of  debt  under  the  present 
monetary  system,  339. 

Power  of  combined  money  capital, 

341- 
Irregularity  of  prices,  342. 
"  Why  silver  falls,"  343. 
Why  falling  prices  throw  workmen 

out  of  employment,  346. 

CHAPTER  XIV. 

Specie  payments,  348. 

The  essential  condition  requisite  to 

give  value  to  paper  money,  349. 
Specie  payments,  349. 
Chief  objection  to  specie  payments, 

350- 

How  banks  of  issue  raise  and  lower 
prices,  351. 

Essential  feature  of  specie  pay- 
ments, 352. 

How  bankers  evade  their  promises, 
352. 


The  chief  evil  of  specie  payments, 

353- 

What  occurred  in  1857,  354. 

What  experience  has  shown,  355. 

Legitimate  banking,  355. 

National  banks  have  special  priv- 
ileges, 356. 

National  banks  are  unfair  monopo- 
lies, 357. 

The  flow  of  coin,  358. 

Results  of  draining  away  money, 
360. 

A  universal  natural  law,  362. 

What  we  should  attempt,  363. 

The  end  toward  which  we  are  trav- 
eling, 363. 

CHAPTER  XV. 

Franchises,  365. 

What  a  patent  is,  365. 

Patents  may  be  used   to   plunder 

the  community,  366. 
What  a  franchise  is,  366. 
What  a  railroad  franchise  is,  367. 
Watered  stock,  368. 

CHAPTER  XVI. 

Interest  of  money,  370. 
The  rate  of  interest  is  too  high,  370. 
Why  men  pay  any  interest,  371. 
Human  nature  is  unchanged,  372. 
Capital  is  necessary   to    existence, 

373; 

Free  interest,  374. 

The    difference    between  the    rich 

and  poor,  376. 
Different  rates  of  interest,  376. 
Note,  377- 

CHAPTER  XVII. 

The  relations  of  capital  and  labor, 

382. 
Need  of  more  capital  than  before 

expensive  machines  were   used, 

383. 
Mistaken  ideas  about  freedom  of 

trade,  384. 
Patent  laws  cause   an    inequitable 

distribution  of  wealth,  384. 
Nature  of  the  antagonism  between 

capital  and  labor,  385. 
Different  interests  produce  different 

conduct,  388. 


INDEX. 


529 


Why  laws  were  created,  388. 
Why     laws      should      continually 

change,  389. 
Contention  between  labor  and  cap- 
ital should  be  settled  by  law,  390. 
Origin  of  law,  391. 
Further  progress  is  necessary,  391. 
Ought  every  man  be  allowed  to  do 

as  he  pleases,  392. 
A  dangerous  doctrine  for  the  rich 

to  preach,  394. 
What  should  be,  395. 
Rise  of  rents,  396. 
Hours  of  labor,  397. 
Comparison  with  a  hundred  years 

ago,  398. 
Is  equity  being  done  ?  400. 
Free  trade   is  possible   only  when 

both     parties     have     liberty    of 

choice,  401. 
How  workmen  may  rob  employers, 

402. 
When  free  trade  occurs,  402. 
What  a  good  bargain  is,  403. 
Laws   are    outgrowths    of   human 

necessity,  403. 
Siege  of  Paris,  404. 
When-  laws  need  revision,  405. 
Test  of  the  wisdom  of  a  law,  405. 

CHAPTER  XVIII. 

Remedies  for  social  conflicts,  407. 

Legislation  should  foster  equality 
of  wealth,  408. 

Measures  should  be  general  in  pref- 
erence to  special,  408. 

Potency  of  money,  409. 

Evils  of  waste,  410. 

Foolish  and  wasteful  brutality,  410. 

Bad  modes  of  building,  41 1. 

Many  kinds  of  waste,  41 1. 

Taxation,  413. 

How  taxes  should  be  levied,  413. 

What  a  tariff  is,  415. 

Taxation  should  always  be  laid 
with  a  twofold  purpose,  415. 

Advantages   of    indirect   taxation, 

417- 
Corporations,  417. 
One  of  the  main  roots  of  the  labor 

question,  418. 
Ownership   of   whatever   performs 

labor  is  ownership  of  labor,  419. 
A  fish-hook-machine,  420. 

34 


A  man  sh(Hild  control  his  means  of 
subsistence,  421. 

Need  of  a  large  amount  of  capital, 
422. 

Inventions  should  not  be  made 
means  of  oppression,  424. 

How  inventions  are  made,  424. 

All  should  be  benefited  by  discov- 
eries and  inventions,  425. 

Growth  of  inequality,  425. 

What  should  be  done,  426. 

CHAPTER  XIX. 

Socialism,  428. 

Horror  of  socialism,  429. 

What  socialism  is,  429. 

A  socialistic  post-office,  430. 

Socialistic  schools,  431. 

Socialistic  libraries  and  parks,  432. 

Socialistic  water   and  fire-engines, 

432. 
Socialistic  money,  433. 
Socialism  at  West  Point,  433. 
Socialistic  enterprises,  434. 
Advantages  of  socialism,  435. 
Should  socialism  be  extended  ?  437. 
Socialism  does  not  favor  laziness, 

and  unthrift,  437. 
How  to  help  the  poor,  438. 
Ungrateful  snobs,  438. 
Future  probabilities,  439. 
Causes  of  discontent,  439. 
Why  some  are  richer  than  others, 

440. 
What  shall  we  do  ?  442. 
Lessons  of  experience,  443. 
"With  what   measure  ye  mete,  it 

shall  be  measured  to  you  again," 

444. 
Need  of  hastening  slowly,  444. 
Need  of  changing  our  patent  laws, 

445- 
No   cheap    telephones    before    the 

year  1900,  446. 
Defects  in  our  social  system,  447. 
Folly  of  violence,  448. 
The  true  course,  448. 

CHAPTER  XX. 

How  shall  we  create  a  stable  cur- 
rency ?  450. 

Stability  of  value  possible  only  when 
conditions  are  stable,  451. 


530 


INDEX. 


Money  is  not  strictly  a  measure  of 

value,  451. 
Difference     between     money    and 

other  standards,  454. 
Some  relative  facts,  455. 
Effect  of  paper  money,  456. 
Effect  of  hoarding-  gold,  457. 
Why  prices  change,  458. 
Changes  in  the  number  of   stand- 
ards, 459. 
Silver  and  gold  are  governed  by  the 

same  natural  law,  460. 
Duty  of  Congress,  461. 
Importance  of  the  dollar  having  a 

uniform  value,  461. 
The  central  question,  463. 
Fruit  of  a  false  premise,  463. 
Money  must  be  adapted  to  public 

intelligence,  464. 
Financial   measures  suggested  for 

consideration    and    amendment, 

465- 

The  proper  inscription,  466. 

A  perfect  currency,  469. 

Successful  use  of  paper  money  re- 
quires intelligetace,  470. 

What  will  ultimately  occur,  471. 

CHAPTER  XXI. 

Ought  the  United  States  maintain 
the  gold  and  the  silver  dollar  at 
an  equality  of  value  ?  473. 

Folly  of  blindly  imitating  other 
nations,  474. 

What  we  have  actually  done,  475. 

What  we  should  now  do,  476. 

How  foreign  commerce  is  con- 
ducted, 476. 

Foreign  trade  is  a  barter  of  one 
thing  for  another,  478. 


The  incentive  of  trade,  479. 

Why  men  engage  in  foreign  com- 
merce, 480. 

Use  of  bills  of  exchange,  481. 

How  England  trades,  482. 

What  wealth  is,  483. 

Would  it  not  be  an  advantage  to 
have  money  similar  to  the  nations 
with  whom  our  trade  is  chiefly 
conducted  ?  484. 

What  effect  would  unlimited  coin- 
age of  silver  produce  ?  485. 

Silver  bullion  will  never  be  easily 
obtained,  486. 

The  end  which  laws  should  seek, 
487. 

The  par  value  delusion,  488. 

Effect  of  limited  coinage,  489. 

Artificial  value  of  coins,  491. 

Hard  pan,  491. 

Gold  premium,  492. 

True  test  of  value,  493. 

How  evils  can  be  averted,  494. 

Social  problems  will  always  be  be- 
fore mankind,  494. 

What  inflation  can  do,  495. 

Confederate  money,  495. 

A  cotton  basis  for  money,  496. 

Why  goods  are  not  sold  when  ac- 
tive inflation  is  progressing,  498. 

How  to  prevent  inflation,  500. 

Study  of  social  topics,  500. 

APPENDIX. 

A  review  of  the  financial  portion 
of  the  first  message  of  President 
Cleveland  and  the  accompanying 
report  of  the  Secretary  of  the 
Treasury,  505. 


